If Embassy Suites uses the Brand in Other Businesses, can I claim damages?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The standard Franchise Agreement permits us to own, operate, manage, franchise, license, lease, or affiliate or associate with any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a competitive brand, or otherwise, at any time and in any location. We and our affiliates have the right to engage in any Other Businesses, even if they compete with your Hotel, the Brand, System Hotels, or Network Hotels, and whether we or our affiliates start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, affiliate or associate with, such Other Businesses.
We may also: (a) modify the System by adding, altering, or deleting elements of the System; (b) use or license to others all or part of the System; (c) use the facilities, programs, services and/or personnel used in connection with the System in Other Businesses; and (d) use the System, the Brand, and the Marks in the Other Businesses. You acknowledge and agree that you have no
rights to, and will not make any claims or demands for, damages or other relief arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including, but not limited to, liability for claims for unfair competition, breach of contract, breach of any applicable implied covenant of good faith and fair dealing, or divided loyalty. "Other Businesses" means any business activity we or our affiliates engage in, other than the licensing of your Hotel.
Source: Item 12 — TERRITORY (FDD pages 67–70)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, franchisees explicitly agree that they cannot claim damages if Embassy Suites uses the brand in other business ventures. The standard Franchise Agreement allows Embassy Suites to engage in any business, whether in the lodging or hospitality industry or not, under the Embassy Suites brand, a competitive brand, or otherwise, at any time and in any location. This includes owning, operating, managing, franchising, licensing, leasing, or affiliating with other businesses.
Embassy Suites and its affiliates have the right to engage in other businesses, even if they compete with a franchisee's hotel, the Embassy Suites brand, or other hotels within the network. This can include starting new businesses, purchasing existing ones, merging, or affiliating with other entities. The document specifies that Embassy Suites may modify the System, use or license parts of it to others, and use facilities, programs, services, and personnel associated with the System in these other businesses.
As a franchisee, you acknowledge that you have no rights to claim damages or seek other relief from Embassy Suites due to these activities. This includes claims for unfair competition, breach of contract, breach of any implied covenant of good faith, or divided loyalty. The definition of "Other Businesses" is broad, encompassing any business activity that Embassy Suites or its affiliates engage in, aside from licensing the franchisee's hotel. This means that Embassy Suites has extensive latitude to operate other ventures, even if they directly compete with your franchise, without being liable for damages.
This lack of protection is a significant risk for prospective franchisees. It is essential to understand that Embassy Suites can operate competing businesses without restriction, potentially impacting the profitability of your franchise. Prospective franchisees should carefully consider this lack of exclusivity and the potential for competition from Embassy Suites's other ventures before investing in a franchise.