Does an Embassy Suites franchisee have a right to cure after the Franchise Agreement terminates?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement (“FA”), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| failure to operate is due to an Event of Force Majeure provided that you have taken reasonable steps to minimize the impact of such events; | ||
| FA §13.2 (7) | you contest in any court or proceeding our ownership of the System or any part of the System or the validity of any of the Marks; | |
| FA §13.2 (8) | you or any Equity Owner with a controlling Equity Interest, or any of your Affiliates, employees, or Management Company, engage in conduct that we reasonably determine is likely to adversely reflect upon or affect in any manner the reputation, goodwill, or business of the Hotel, the System, us and/or our Affiliates; | |
| FA §13.2 (9) | you conceal revenues, maintain false books and records of accounts, submit false reports or information to us or otherwise attempt to defraud us; | |
| FA §13.2 (10) | you Transfer any interest that is not in compliance with the Franchise Agreement; | |
| FA §13.2 (11) | you, your Affiliate or any Guarantor become a Sanctioned Person or are owned or controlled by a Sanctioned Person or otherwise breach the representations in the Franchise Agreement; | |
| FA §13.2 (12) | Information is disclosed involving you or your Affiliates, which, in our business judgment, is likely to adversely reflect on or affect in any manner, any gaming licenses or permits held by us or our affiliates or the then-current stature of us or any of our affiliates with any gaming commission, board, or similar governmental or regulatory agency; | |
| FA §13.2 (13) | any Guarantor breaches its guaranty to us; | |
| FA §13.2 (14) | a threat or danger to public health or safety results from the construction, maintenance, or operation of the hotel; | |
| FA §13.2 (15) | you, your Affiliate or a Guarantor become a Competitor except as otherwise permitted by Subsection 5.1.29; | |
| FA §13.2 (16) | any of Your Hotel Agreements is terminated based on a breach or default by you or your Affiliates; or | |
| FA Shared Facilities Addendum | if we withdraw our consent to your Hotel’s use of Shared Facilities and you fail to construct comparable facilities or amenities in order for the Hotel to meet the Standards. | |
| HITS Agreement | You have no right to cure once your Franchise Agreement terminates. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, an Embassy Suites franchisee does not have a right to cure any issues related to the franchise agreement after the agreement has been terminated. This means that once the Franchise Agreement is terminated, the franchisee loses the opportunity to correct any defaults or breaches of the agreement.
This lack of a post-termination cure period is a significant point for prospective franchisees. Typically, franchise agreements allow a period for franchisees to remedy breaches before termination. The absence of this right in the Embassy Suites agreement means that any termination decision is final, and the franchisee has no recourse to reinstate the agreement by correcting the issue.
Given this condition, it is crucial for potential Embassy Suites franchisees to understand the grounds for termination and ensure strict compliance with all terms of the Franchise Agreement to avoid termination. This includes carefully managing operations, maintaining accurate records, and adhering to brand standards, as any misstep could lead to immediate termination without an opportunity to rectify the situation.