For an Embassy Suites franchise, what is a franchisee prohibited from doing regarding lease, management, or similar agreements 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 the 2025 Embassy Suites Franchise Disclosure Document, a franchisee is prohibited from entering into any lease, management agreement, or other similar arrangement for the operation of the hotel or any part of the hotel without the prior written consent of Embassy Suites.
This requirement ensures that Embassy Suites maintains control over the operation and management of its franchised hotels. 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 inexperienced, unqualified in managerial skills or operating capability, or is unable or unwilling to adhere fully to the franchisee's obligations under the Franchise Agreement.
If an approved management company becomes a competitor, resigns, is terminated by the franchisee, or otherwise becomes unsuitable or unqualified to manage the hotel during the term, the franchisee has 90 days to retain a substitute management company that is acceptable to Embassy Suites. This provision allows for a transition period to ensure continued competent management of the hotel while still adhering to Embassy Suites' standards and requirements.