If Embassy Suites reduces the amount of any payment or credit to a franchisee, what does this include?

According to Embassy Suites's 2025 Franchise Disclosure Document, if Embassy Suites reduces the amount of any payment or credit to a franchisee, this reduction can include any amount that the franchisee owes to Embassy Suites or its affiliates. This means that if a franchisee has outstanding debts or financial obligations to Embassy Suites, the franchisor can offset those debts by reducing any payments or credits that would otherwise be due to the franchisee.

This policy has significant implications for prospective Embassy Suites franchisees. It means that Embassy Suites has the right to use any payments or credits due to a franchisee to settle outstanding debts. This could affect a franchisee's cash flow and profitability, especially if they are experiencing financial difficulties or have ongoing disputes with Embassy Suites regarding fees or other financial obligations.

It is important for prospective franchisees to carefully review the Franchise Agreement and understand all of their financial obligations to Embassy Suites. They should also maintain accurate records of all payments and credits to ensure that they can track any offsets made by Embassy Suites. Franchisees should also clarify with Embassy Suites the specific circumstances under which such offsets may occur and the procedures for resolving any disputes related to these offsets. This level of transparency can help in financial planning and prevent misunderstandings during the franchise term.