For an Embassy Suites franchise, is a franchisee allowed to enter into any lease, management agreement, or similar arrangement for the operation of the Hotel without prior written consent?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
7.2 You represent and agree that you have not, and will not, enter into any lease, management agreement or other similar arrangement for the operation of the Hotel or any part of the Hotel without our prior written consent. To be approved by us as the operator of the Hotel, you, or any proposed Management Company, must be qualified to manage the Hotel. We may refuse to approve you or any proposed Management Company that is a Competitor or which, in our business judgment, is inexperienced, or unqualified in managerial skills or operating capability, or is unable or unwilling to adhere fully to your obligations under this Agreement.
- 7.3 If your approved Management Company becomes a Competitor, resigns or is terminated by you, or otherwise becomes unsuitable or unqualified, in our sole business judgment, to manage the Hotel during the Term, you will have ninety (90) days to retain a substitute Management Company that is acceptable to us.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, franchisees are not allowed to enter into any lease, management agreement, or similar arrangements for the operation of the hotel without prior written consent from Embassy Suites. This requirement ensures that Embassy Suites maintains control over the management and operation of its franchised hotels, safeguarding brand standards and customer experience.
To be approved as the operator of the hotel, the franchisee or any proposed management company must be qualified to manage the hotel. Embassy Suites may refuse to approve a franchisee or management company that is a competitor or is deemed inexperienced, unqualified in managerial skills or operating capability, or unwilling to adhere fully to the obligations outlined in the Franchise Agreement. This provision allows Embassy Suites to ensure that the hotel is managed by competent and brand-loyal operators.
If an approved management company becomes a competitor, resigns, is terminated, or otherwise becomes unsuitable or unqualified, the franchisee has 90 days to retain a substitute management company that is acceptable to Embassy Suites. This timeframe provides the franchisee with an opportunity to find a suitable replacement while ensuring that the hotel's management remains in compliance with Embassy Suites' standards. Overall, these stipulations are typical in the hotel franchising industry, where maintaining consistent brand standards is crucial for success.