For Embassy Suites, what happens to the covenants, terms, or provisions of the Agreement that provide for continuing obligations after the expiration or termination of the Agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree: (i) the expiration or termination of the Franchise Agreement will terminate all of your rights to operate an eforea spa; and (ii) this Amendment can be terminated for any of the grounds set forth in the termination provisions of the Franchise Agreement, whether or not the Franchise Agreement is also terminated, following which you will have no further right to use the name "eforea" in connection with the operation of a spa at the Hotel Site.
Your Obligations On Termination or Expiration.
In the event of a termination or expiration with respect to your right to operate the spa as an eforea spa, in addition to, and not in lieu of, any of your obligations that arise on termination or expiration of the Franchise Agreement, you will immediately:
(a) cease using the eforea name, and any other names, marks, trade dress, systems, insignia, symbols, and other rights, procedures and methods licensed to you under this eforea Amendment with respect to the operation of a spa, and any confusingly similar names, marks, trade dress, systems, insignia, symbols, procedures and methods;
(b) deliver all goods and materials containing that portion of the Marks related to the operation of an eforea spa to us and we will have the sole and exclusive use of any items containing those Marks;
11.2 Casualty.
- 11.2.1 You must immediately inform us if the Hotel is damaged by fire or other casualty or event of Force Majeure. If the damage or repair requires closing the Hotel, you may choose to repair or rebuild the Hotel according to the Standards, provided you: begin reconstruction within six (6) months after closing and reopen the Hotel for continuous business operations as soon as practicable (but in any event no later than eighteen (18) months after the closing of the Hotel) and give us at least thirty (30) days' notice of the projected date of reopening. Once the Hotel is closed, you will not promote the Hotel as a System Hotel or otherwise identify the Hotel using any of the Marks without our prior written consent.
- 11.2.2 You and we each have the right to terminate this Agreement if you elect not to repair or rebuild the Hotel as set forth above in Subsection 11.2.1, provided the terminating Party gives the other Party sixty (60) days written notice. You are not required to pay Liquidated Damages [SELECT FOR CI, OL or a Termination Fee**]** unless you or one of your Affiliates own and/or operate a hotel at the Hotel Site within three (3) years of the termination date under a lease, license or franchise from a Competitor.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
The 2025 Embassy Suites Franchise Disclosure Document outlines several obligations a franchisee must adhere to even after the franchise agreement expires or is terminated. Specifically, if the franchisee operates a spa under the "eforea" name as part of their Embassy Suites hotel, the termination or expiration of the Franchise Agreement also terminates all rights to operate the eforea spa.
Upon termination or expiration, the franchisee must immediately cease using the "eforea" name and any related trademarks, trade dress, systems, and methods associated with the spa. All goods and materials containing the "eforea" marks must be delivered to Embassy Suites, granting them sole and exclusive use of those items. This ensures that the franchisee cannot continue to benefit from the brand's reputation after the agreement ends.
Additionally, if the Embassy Suites hotel is damaged by fire or another casualty and the franchisee chooses not to repair or rebuild it, either party can terminate the agreement with sixty days' written notice. However, the franchisee is not required to pay liquidated damages or a termination fee unless they or an affiliate operate a hotel at the same site within three years under a competitor's brand. This clause prevents franchisees from quickly switching to a competing brand after a termination without facing additional financial consequences.