What does the Embassy Suites franchisor document in the Amendment to the Franchise Agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
n of any control or transfer provisions of the Franchise Agreement, and shall not be subject to any right of first refusal or right of first offer contained in the Franchise Agreement.
- (c) Franchisor's Rights to Terminate Franchise Agreement. Notwithstanding any other provision of this letter agreement, Franchisor may terminate the Franchise Agreement if any of the following occur: (i) Franchisee's default or any subsequent default, in the sole opinion of Franchisor, damages the image or reputation of Franchisor or any brand name owned and/or licensed by Hilton Worldwide Holdings Inc., a Delaware corporation, or its subsidiaries or affiliates (collectively, "Hilton"); (ii) Franchisor is required to terminate the Franchise Agreement by court order or action of any trustee in bankruptcy or debtor in possession of the Hotel; or (iii) the Additional Period expires without other arrangements satisfactory to Franchisor in its sole discretion having been entered into between Franchisor and Lender.
- (d) Expiration of Franchise Agreement. Nothing in this letter agreement will extend the Franchise Agreement beyond its stated expiration date.
- (e) Receiver Appointment. If a receiver is appointed to operate the Hotel at the request of Lender, Franchisor may require the receiver to enter into Franchisor's the
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the franchisor documents the amendment to the franchise agreement primarily in the context of a lender assuming the rights and obligations of a franchisee, particularly after an acquisition or equity acquisition. The amendment serves to formally document the assumption of the franchise agreement by the lender, including a new ownership structure if it's an equity acquisition.
Specifically, the lender must provide all necessary information to the Embassy Suites franchisor to confirm they are not a Sanctioned Person. Once confirmed, Embassy Suites will prepare an amendment to document the assumption. The lender is then required to execute and return this amendment within ten business days of receipt. Failure to comply can result in a default under the franchise agreement, potentially leading to termination.
In the case of an assumption, the lender is obligated to pay Embassy Suites a processing fee, which is equivalent to the permitted transfer fee outlined in the franchise agreement. If the franchise agreement does not specify a transfer fee, the processing fee is $5,500. Furthermore, any renovation requirements imposed by Embassy Suites in connection with the assumption will not exceed what could have been imposed had the original franchisee remained in control. These stipulations ensure that Embassy Suites maintains standards and receives appropriate compensation during changes in ownership or control facilitated by lenders.