What is the Franchisee required to certify to the Franchisor regarding the Franchise Agreement as consideration for the letter agreement relating to the Loan for an Embassy Suites franchise?

According to Embassy Suites' 2025 Franchise Disclosure Document, as consideration for a letter agreement relating to a loan, the franchisee must certify to the franchisor that the Franchise Agreement is in full force and effect. Additionally, the franchisee must confirm that no default, claim, breach, offset, defense to full and strict enforcement, waiver, or estoppel (collectively termed "Claim"), or any 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 requirement ensures that the franchisor is protected against any potential disputes or liabilities related to the Franchise Agreement before entering into the letter agreement concerning the franchisee's loan. By providing this certification, the franchisee affirms the validity and enforceability of the Franchise Agreement and acknowledges that there are no outstanding issues that could negatively impact the franchisor.

For a prospective Embassy Suites franchisee, this means that before securing a loan, they must conduct a thorough review of their compliance with the Franchise Agreement. They need to ensure that all obligations are met, and no potential claims or defaults exist. Failure to do so could result in the franchisee being unable to provide the required certification, which may impede their ability to obtain financing. This requirement highlights the importance of maintaining a strong and compliant relationship with Embassy Suites throughout the term of the Franchise Agreement.