Is an Embassy Suites franchisee permitted to enter into contracts in the name of the franchisor or its affiliates?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
15.2 Notices Concerning Your Independent Status. All contracts for the Hotel's operations and services at the Hotel will be in your name or in the name of your Management Company. You will not enter into or sign any contracts in our name or any of our Affiliates' names or use the Marks or any acronyms or variations of the Marks. You will disclose in all dealings with the public and your employees, agents, contractors, suppliers and other third parties that: (a) you are the Hotel's owner; (b) you are an independent entity; (c) you are the employer, principal, or contracting party (as applicable); and (d) we are not responsible for your liabilities or debts in any manner whatsoever.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from entering into contracts in the name of Hilton Franchise Holding LLC (the franchisor) or its affiliates. The franchise agreement emphasizes the independent contractor status of the franchisee.
Embassy Suites franchisees must ensure that all contracts for the hotel's operations and services are in their own name or, if applicable, in the name of their management company. This requirement reinforces the separation between the franchisee's business and the franchisor, Hilton. Franchisees are also barred from using Embassy Suites' trademarks, acronyms, or variations thereof when entering into contracts.
Furthermore, Embassy Suites franchisees are obligated to disclose their independent status in all dealings with the public, employees, agents, contractors, suppliers, and other third parties. This disclosure must clearly state that the franchisee owns the hotel, operates as an independent entity, and is the responsible party for all contractual obligations. It must also be made clear that Hilton is not responsible for the franchisee's liabilities or debts.
This provision protects Hilton from potential liabilities arising from the franchisee's operations and ensures that all parties are aware of the franchisee's independent contractor status. It is a standard practice in franchising to maintain a clear distinction between the franchisor and franchisee to avoid legal and financial entanglements.