What happens if a transfer of the Embassy Suites franchise is not in compliance with Section 12?

According to the 2025 Embassy Suites Franchise Disclosure Document, if any transfer of the franchise is not in compliance with Section 12 and its subparts, it constitutes an event of default under the franchise agreement. This means that Embassy Suites has grounds to terminate the franchise agreement.

Section 12 of the Embassy Suites agreement outlines the specific procedures and requirements for transferring ownership or control of the franchise. These provisions cover various scenarios, including transfers to affiliates, family members, or third parties. Non-compliance could involve failing to obtain franchisor consent, not meeting financial or operational standards, or violating other stipulations detailed in the agreement.

For a prospective Embassy Suites franchisee, this underscores the critical importance of fully understanding and adhering to the transfer provisions. Any deviation from the prescribed process could lead to the termination of the franchise agreement, resulting in significant financial and operational disruptions. Franchisees should seek legal counsel to ensure they fully comply with all transfer requirements to avoid potential default situations.