Does the Embassy Suites FDD Item 6 specify the consequences of not paying fees?

According to the 2025 Embassy Suites Franchise Disclosure Document, Item 6 addresses the consequences of failing to pay fees or comply with program policies. Specifically, it states that failure to pay fees or commissions when due, or failure to comply with the applicable program policies, terms, and rules may result in the loss of access to certain programs or individual sales and distribution channels. This means that if an Embassy Suites franchisee does not meet their financial obligations or follow the rules of the various sales and distribution programs, they risk losing access to those programs. This could impact their hotel's visibility and revenue streams.

For a prospective Embassy Suites franchisee, this highlights the importance of understanding and adhering to all fee payment schedules and program requirements. Failure to do so could lead to tangible business disadvantages. The FDD also mentions that Embassy Suites may add, remove, or modify sales and distribution programs at any time, and these programs may have individual criteria for participation. This implies that franchisees need to stay informed about any changes to these programs and their associated policies to ensure continued compliance.

Embassy Suites may require hotels to participate in certain programs or combinations of programs, and some programs may utilize automatic enrollment with an opt-out option. This underscores the need for franchisees to actively manage their participation in these programs to avoid unwanted fees or non-compliance issues. The document also states that Embassy Suites may reduce the amount of any payment or credit to the franchisee by any amount that the franchisee owes to them or their affiliates. This clause provides Embassy Suites with the ability to offset any outstanding debts against payments due to the franchisee, further emphasizing the importance of maintaining good financial standing with the franchisor.