What happens if I lose possession of the Embassy Suites Hotel or Hotel Site?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
13.2 Immediate Termination by Us. We may immediately terminate this Agreement on written notice to you and without any opportunity to cure the default if:
13.2.5 you or your Guarantor lose possession or the right to possession of all or a significant part of the Hotel or Hotel Site for any reason other than those described in Section 11;
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the loss of possession or right to possession of the hotel or hotel site can lead to immediate termination of the franchise agreement. Specifically, Embassy Suites may terminate the agreement with written notice and without an opportunity for the franchisee to correct the issue if the franchisee or their guarantor loses possession of all or a significant part of the Hotel or Hotel Site for any reason other than those described in Section 11 of the agreement. Section 11 pertains to situations involving casualty, such as damage to the hotel due to fire or other events.
This provision underscores the critical importance of maintaining control over the physical location of the Embassy Suites hotel. Loss of possession could arise from various circumstances, including foreclosure, eviction, or failure to maintain lease obligations. The immediate termination clause highlights the potential financial and operational risks for a franchisee, as it could result in the abrupt loss of the franchise and associated revenue streams.
Prospective Embassy Suites franchisees should carefully review the conditions under which loss of possession could occur and assess their ability to mitigate such risks. Understanding the terms of the franchise agreement related to property control and consulting with legal and financial advisors is essential to ensure they can meet these obligations and avoid potential termination.