What happens if any of the Hotel Agreements for an Embassy Suites are terminated due to a breach by the franchisee?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement (“FA”), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| FA §13.2 (16) | any of Your Hotel Agreements is terminated based on a breach or default by you or your Affiliates; or | |
| 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, if any of the Hotel Agreements are terminated due to a breach or default by the franchisee or their affiliates, it constitutes grounds for termination of the Franchise Agreement.
Specifically, the FDD outlines various scenarios that can lead to termination. These include concealing revenues, maintaining false records, transferring interests non-compliant with the Franchise Agreement, becoming a Sanctioned Person, or engaging in conduct that adversely affects the reputation of the hotel or the Embassy Suites system. A threat to public health or safety resulting from the hotel's operation, or becoming a Competitor (except as permitted), can also trigger termination.
Upon termination of the Franchise Agreement, the franchisee loses any right to cure the breach under the HITS Agreement. The franchisee must immediately cease operations as an Embassy Suites, discontinue using Embassy Suites's software and related documents, and return all copies of proprietary materials. This underscores the importance of adhering to the terms of the agreements to avoid potential termination and its associated consequences.