Is the Embassy Suites franchisee prevented from copying or reproducing the provisions of the letter agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Confidentiality and Non-Disclosure. The provisions of this letter agreement shall not be disclosed by Lender or Franchisee to any third party, excepting (a) the respective employees, directors, officers, agents, regulators or legal and financial representatives of each of Franchisee, Lender and Lender's servicers, trustees and certificate holders, on a need-to-know basis; (b) as required by law; (c) as mutually agreed to by the parties; (d) as part of any due diligence performed as a part of a sale, assignment, participation or securitization of the Loan by Lender, or a sale of the Hotel after an Acquisition; (e) any investor or potential investor in, or underwriter of, the Loan; and/or (f) any rating agency that rates securities backed by the Loan. Except as provided above, Franchisee and Lender agree not to copy, reproduce or otherwise make available in any form whatsoever to any other person, firm, corporation, or business the provisions of this letter agreement.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the franchisee is generally restricted from copying or reproducing the provisions of the letter agreement. The letter agreement contains confidentiality and non-disclosure clauses that limit the dissemination of its contents to third parties.
Specifically, the franchisee agrees not to copy, reproduce, or make available the provisions of the letter agreement to any person, firm, corporation, or business. There are exceptions to this rule, allowing disclosure to employees, directors, officers, agents, regulators, or legal and financial representatives of the franchisee, lender, and lender's servicers, trustees, and certificate holders, provided it is on a need-to-know basis. Disclosure is also permitted if required by law, mutually agreed upon by the parties, or as part of due diligence related to a sale, assignment, participation, or securitization of the loan by the lender, or a sale of the hotel after an acquisition. Additionally, disclosure can be made to any investor, potential investor, or underwriter of the loan, and any rating agency that rates securities backed by the loan.
This restriction ensures the confidentiality of the agreement's terms, which is typical in franchising to protect sensitive business information. Franchisees should be aware of these limitations and ensure compliance to avoid potential breaches of the agreement. It is important to note that the franchisor and lender also have similar confidentiality obligations under the agreement.