What does the Embassy Suites franchisee certify to the franchisor regarding the Franchise Agreement as consideration for the letter agreement?

According to Embassy Suites' 2025 Franchise Disclosure Document, as consideration for a letter agreement relating to a loan, the franchisee certifies to the franchisor that the Franchise Agreement is in full force and effect. Additionally, the franchisee confirms that no default, claim, breach, offset, defense to full and strict enforcement, waiver, or estoppel (collectively referred to as "Claim"), or condition that could become a Claim, currently exists or has existed against the franchisor under the Franchise Agreement. This certification may also extend to any existing comfort letter, if applicable.

This certification serves as an assurance to Embassy Suites that the franchisee is in good standing and has no outstanding issues with the franchisor at the time the letter agreement is executed. It protects the franchisor by preventing the franchisee from later raising claims or defenses related to the Franchise Agreement that existed but were not disclosed at the time of the agreement. This is particularly important in the context of a loan, as it ensures that the lender has a clear understanding of the franchisee's relationship with Embassy Suites.

For a prospective Embassy Suites franchisee, this requirement highlights the importance of maintaining a compliant and transparent relationship with the franchisor. Before entering into any loan agreements or related letter agreements, franchisees should ensure that they are not in default and that all obligations under the Franchise Agreement are being met. Failure to do so could result in complications or disputes during the loan process. Franchisees should also carefully review the terms of the letter agreement and seek legal counsel to fully understand their rights and obligations.