Is the execution of the HITS Agreement a condition for the Embassy Suites customer under the TSP Agreement?

According to Embassy Suites's 2025 Franchise Disclosure Document, the execution of the HITS (Hilton Information Technology Systems) Agreement is a condition for the customer under the TSP (Total Solution Program) Agreement. Specifically, the benefits provided to the customer and the obligations of HSS (Hilton Systems Solutions, LLC) under the TSP Agreement are subject to the customer executing the HITS Agreement contemporaneously with the TSP Agreement. This means that both agreements should be signed at or around the same time for the TSP Agreement to be fully effective.

This condition implies that an Embassy Suites franchisee must enter into the HITS Agreement to receive the benefits of the TSP Agreement. The TSP Agreement outlines the technology and equipment provided to the hotel, and the HITS Agreement likely covers broader IT systems and support. Failing to execute the HITS Agreement could prevent the franchisee from accessing the technology and support outlined in the TSP Agreement.

Furthermore, the FDD states that any default by the customer under the HITS Agreement will constitute a default and breach of condition under the TSP Agreement. This creates a dependency between the two agreements, where compliance with the HITS Agreement is essential for maintaining good standing under the TSP Agreement. Conversely, any default by the customer under the TSP Agreement will constitute a default under the HITS Agreement, allowing HSS to exercise its rights under the HITS Agreement.

In summary, the execution and ongoing compliance with the HITS Agreement are critical for an Embassy Suites franchisee to fully benefit from and remain in good standing with the TSP Agreement. This interconnectedness highlights the importance of understanding the terms and obligations of both agreements before entering into a franchise agreement.