Following the expiration or termination of the Embassy Suites franchise agreement, do my obligations to Embassy Suites under Section 14 of the agreement survive?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
"Damages Upon Termination By Us. If we terminate the Agreement under Subsection 13.1 or 13.2 above, you acknowledge your default will cause substantial damage to us. You therefore agree that if we terminate this Agreement, the termination will not be our sole remedy, and you will also be liable to us for all damages and losses we have suffered arising from the early termination of this Agreement to the same extent as if you had improperly terminated the Agreement. You also agree that you will remain liable for all other obligations and claims under this Agreement, including obligations following termination under Subsections 13.6, 9.6, 10.3 and Section 14 and other damages suffered by us arising out of your breach or default."
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, your obligations to Embassy Suites under Section 14 of the franchise agreement do survive the termination or expiration of the agreement. Specifically, a clause in the agreement states that if Embassy Suites terminates the agreement due to your default, you will remain liable for all obligations and claims, including those outlined in Section 14, along with Subsections 9.6, 10.3, and 13.6.
This means that even after the franchise agreement ends, you may still be responsible for certain financial or operational requirements detailed in those sections. This could include outstanding payments, adherence to brand standards during and after the transition, or other post-termination responsibilities.
For franchisees in North Dakota, it's important to note that while the standard agreement stipulates that New York law governs the agreement, North Dakota law supersedes any conflicting provisions. However, the FDD states that the clause regarding the franchisee's obligations after termination of the agreement still applies in North Dakota. Therefore, it is important to consult with legal counsel to fully understand the implications of these clauses and how they apply to your specific circumstances.