What fees must an Embassy Suites customer pay upon termination of the agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
d, provided or used; (b) the employees and contractors Customer uses in connection with its operation of the Hotel; and (c) data and records. No such audit will unreasonably interfere with Customer's normal business operations. Customer agrees that HSS will not be responsible for any of Customer's costs incurred in cooperating with any audit.
ARTICLE 4. TERMINATION
- 4.1 4.1 Termination. HSS may terminate this Agreement by written notice to Customer on any of the following grounds:
- 4.1.1 Customer fails to pay any sums due and payable under this Agreement and fails to cure such failure within the cure period set forth in the notice, which will not be less than ten (10) days;
- 4.1.2 Customer breaches its obligations under Article 6 (Confidentiality);
- 4.1.3 Customer fails to refresh the Authorized Equipment at the Hotel as required by HSS; and
- 4.1.4 Customer breaches any other provision of this Agreement and does not cure that breach within the cure period set forth in the notice, which will not be less than thirty (30) days.
This Agreement will automatically terminate upon the termination or expiration of the Relationship Agreement.
4.2 4.2 Customer's Obligations upon Termination or Expiration. Upon any such termination the licenses granted to Customer under this Agreement, and the obligations of HSS to provide any Agreement Products and Services will immediately terminate. Customer will immediately cease using all Agreement Products and Services and promptly at HSS's discretion return any and all Agreement Products to HSS other than Authorized Equipment Customer owns, or destroy the same; provided, however, that Customer must return to HSS all Software contained in such Authorized Equipment. All of Customer's covenants and obligations under this Agreement will survive termination and expiration.
- 4.3 4.3 Termination Fees. Upon termination of this Agreement Customer will pay: (a) all unpaid Fees related to the Agreement Products and Services, Software and Authorized Equipment incurred by Customer; (b) all costs to HSS of all the Agreement Products and Services, Software and Authorized Equipment that exceeds what the Customer paid for same; (c) all termination, penalty or administrative fees that would not be payable but for the termination for cause; (d) all costs related to disabling the Agreement Products and Services, together with related intervention or administration fees; (e) all costs and fees for any Authorized Equipment, Authorized Equipment maintenance Services, Software, Software maintenance Services, network and other Services HSS and its Affiliates, in their sole discretion, provide to Customer at Customer's request after the termination effective date; and (f) all termination fees identified in the Customer's Order Document.
- 4.4 4.4 Suspension of Service. If Customer fails to comply with the Information System use regulations, rules or policies, or is otherwise in default under this Agreement HSS may, in its sole discretion: (a) disable Customer's access to or use of all or any part of the Information System and suspend any part of the Services provided or supported under this Agreement and (b) suspend and withhold performance of HSS's obligations under this Agreement. Customer will not be entitled to any compensation, refund or reduction in charges as a result of such action. Customer agrees that any such disabled access and suspension from the Information System will not constitute or result in actual or constructive termination or abandonment of this Agreement, or a waiver or release of any right to terminate. HSS may charge Customer for the cost relating to such disabling and suspending and, if Customer's defaults are cured as required, re-enabling such access and resuming such obligations, if any, together with related intervention or administration fees.
- 4.5 Limitation on Access.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 FDD, Embassy Suites customers may face several fees upon termination of their agreements, depending on the specific circumstances and agreements in place. These fees are detailed across multiple sections of the FDD, particularly concerning the HITS Agreement and the TSP Agreement.
The customer is responsible for all unpaid fees related to Agreement Products and Services, Software, and Authorized Equipment. They must also cover any costs to HSS for these items that exceed what the customer has already paid. Additional termination, penalty, or administrative fees may apply if the termination is for cause. The customer will also be responsible for costs associated with disabling the Agreement Products and Services, including intervention or administration fees, as well as fees for any services HSS provides after the termination date at the customer's request. Termination fees identified in the customer's order document will also be due.
If the TSP Agreement is terminated, the customer may need to assume any remaining lease payments for Network Authorized Equipment or purchase the equipment from HSS's lessor. The customer will also be responsible for subsequent Equipment Maintenance and Software Maintenance fees and costs. If termination occurs before three years since HSS incurred Refresh Costs for Network Authorized Equipment, the customer must reimburse HSS for the unamortized value of these costs, calculated monthly over a 36-month period.
Furthermore, a termination fee applies to reimburse HSS and its Preferred Provider for unamortized costs, including Certified Third Party Software and startup costs for maintenance services under the HITS Agreement. This fee varies depending on when the termination occurs relative to the Start Date (shipment date of Network Authorized Equipment). The termination fee schedule is as follows: $3,600 if terminated during the first year, $2,600 during the second year, $1,300 during the third year, and $1,200 thereafter. If termination occurs after a Customer Refresh of Authorized Equipment, the termination fees are: $3,800 during the first year, $2,800 during the second year, $1,400 during the third year, and $1,200 thereafter.