What happens if my Embassy Suites Management Company resigns or is terminated?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ral manager and other personnel, such as the director of sales, to attend training programs that pertain to the operational functions of the Hotel related to those roles as are necessary to meet our Brand Standards. If your Management Company resigns or is terminated by you, or otherwise becomes unsuitable or unqualified to operate the Hotel as determined by us, in our sole judgment, you must retain a new Management Company that is acceptable to us within 90 days.
You are solely responsible for the management and operation of your Hotel at all times, regardless of whether you are an individual, corporation, limited liability company, partnership or other entity. Your engagement of a Management Company does not reduce your obligations under the Franchise Agreement. We may communicate directly with your managers and Management
Company, and we have the right to rely on their communications to us as being on made your behalf.
We will not require you or your Management Company to sign an agreement not to compete with us after the Franchise Agreement terminates or expires.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 74–75)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, if your Management Company resigns, is terminated by you, or becomes unsuitable or unqualified to operate the hotel as determined by Embassy Suites, you must retain a new Management Company that is acceptable to them within 90 days. Embassy Suites has the sole judgment in determining if the Management Company is suitable or qualified to operate the hotel.
This requirement ensures that the Embassy Suites hotel maintains consistent operational standards even if there are changes in the management. It also protects the brand's reputation and service quality. The 90-day window provides a limited timeframe to find a suitable replacement, which could be challenging depending on the availability of qualified management companies.
Furthermore, Embassy Suites retains the right to not approve a Management Company if they are considered a Competitor. If your Management Company becomes a Competitor, you have 90 days to retain a qualified substitute Management Company that Embassy Suites approves. A "Competitor" is defined as an entity that owns, licenses, or franchises a Competing Brand. A "Competing Brand" is a hotel brand or trade name that, in Embassy Suites's sole business judgment, competes with the System or any Network Hotel.
As a prospective franchisee, it is important to have a contingency plan in place for management changes and to understand the criteria Embassy Suites uses to evaluate and approve Management Companies. You should also clarify what specific factors would cause Embassy Suites to deem a Management Company unsuitable or unqualified.