Can an Embassy Suites franchisee claim monetary damages if consent is unreasonably withheld?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.6.2 You agree not to make a claim for money damages based on any allegation that we have unreasonably withheld or delayed any consent or approval to a proposed act by you under the terms of this Agreement.
You also may not claim damages by way of set-off, counterclaim or defense for our withholding of consent.
Your sole remedy for the claim will be an action or proceeding to enforce the provisions of this Agreement by specific performance or by declaratory judgment.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, franchisees are prohibited from claiming monetary damages if Embassy Suites withholds or delays consent or approval for a proposed act. Specifically, the franchisee waives the right to seek money damages based on allegations of unreasonably withheld or delayed consent.
This waiver extends to claims for damages through set-off, counterclaim, or defense related to the withholding of consent. However, the document outlines that the franchisee's sole recourse is to pursue legal action or proceedings to enforce the provisions of the agreement through specific performance or declaratory judgment. This means a franchisee can seek a court order compelling Embassy Suites to act or a judgment clarifying the rights and obligations of both parties.
This provision significantly limits a franchisee's remedies in the event of a dispute over withheld consent. While a franchisee can still seek legal remedies, they are restricted to actions that compel Embassy Suites to act or clarify the agreement, rather than seeking financial compensation for any losses incurred due to the withholding of consent. Prospective franchisees should carefully consider this limitation and its potential impact on their ability to resolve disputes with Embassy Suites.