When will the Incentive be disbursed to an Embassy Suites franchisee?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We may, in our sole discretion, offer incentives for new hotels ("Incentives"). An Incentive is a financial contribution that we make to assist with the development or conversion of your Hotel. To receive an Incentive, you and your principals must sign a development incentive note ("Note") in the form attached as Exhibit D-2 when you sign the Franchise Agreement. An Incentive does not have to be repaid, unless the franchise terminates before the end of the Term or a transfer occurs as described below. The Incentive will be disbursed to you within 30 days after the Hotel opens with our consent, as long as: (a) there have been no material adverse changes in the business, legal, litigation, bankruptcy status or finances of you, any guarantors, or the project since we granted approval; (b) you have completed any required PIP; and (c) you have paid the Franchise Application Fee.
Source: Item 10 — FINANCING (FDD pages 52–53)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, an Incentive, which is a financial contribution from Embassy Suites to assist with the development or conversion of a hotel, will be disbursed to the franchisee within 30 days after the hotel opens with Embassy Suites's consent.
However, this disbursement is contingent upon meeting certain conditions. First, there must be no material adverse changes in the business, legal, litigation, bankruptcy status, or finances of the franchisee, any guarantors, or the project since Embassy Suites granted approval. Second, the franchisee must have completed any required Property Improvement Plan (PIP). Finally, the franchisee must have paid the Franchise Application Fee.
To formalize the Incentive, the franchisee and their principals are required to sign a development incentive note when they sign the Franchise Agreement. This note outlines the terms of the Incentive, including the conditions under which it must be repaid. The Incentive does not have to be repaid unless the franchise terminates before the end of its term or a transfer occurs as described in the FDD.