Does Embassy Suites generally guarantee any note, lease, or other obligations?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We generally do not offer any other financing or guarantee any note, lease, or other obligations. However, in unique or rare circumstances we may choose to offer other types of financing such as, for example, a mezzanine loan or a guaranty of your note, lease, or other obligations. In that event, the arrangements we offer would be based on the unique circumstances and financial situation of your Hotel. As a result, we cannot determine in advance the key terms such as, for example, the amount, term, repayment obligations, interest, fees, costs, penalties, security interests, default provisions, and other conditions or requirements. We also cannot determine in advance the type of documentation that would be required such as, for example, notes, guarantees, security agreements, mortgages, deeds, assignments, equity pledges, credit letters, intercreditor agreements, or other instruments. We do not have sample forms of these types of documents. These documents and each of their terms would be agreed at the time of origination.
Source: Item 10 — FINANCING (FDD pages 52–53)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, Embassy Suites generally does not guarantee any note, lease, or other obligations for franchisees. However, in unique or rare circumstances, Embassy Suites may choose to offer other types of financing, such as a mezzanine loan or a guaranty of a franchisee's note, lease, or other obligations.
If Embassy Suites were to offer such financing or a guarantee, the specific arrangements would depend on the unique circumstances and financial situation of the hotel. Therefore, the key terms, such as the amount, term, repayment obligations, interest, fees, costs, penalties, security interests, and default provisions, cannot be determined in advance. The type of documentation required, such as notes, guarantees, security agreements, mortgages, deeds, assignments, equity pledges, credit letters, or intercreditor agreements, also cannot be determined in advance, and Embassy Suites does not have sample forms of these documents.
These documents and their terms would be agreed upon at the time of origination, indicating that any such financial support is highly individualized and not a standard part of the franchise offering. Prospective franchisees should not rely on receiving such guarantees and should secure financing independently. This is a fairly standard practice in the franchise industry, as franchisors typically do not provide financial guarantees to franchisees.