What is included in the definition of 'Equity Interest' related to an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
12.2.1.2.1 Affiliate Transfer. You or any Equity Owner may Transfer an Equity Interest or this Agreement to an Affiliate.
12.2.1.2.2 Transfers to a Family Member or Trust. If you or any Equity Owner as of the Effective Date are a natural person, you and such Equity Owner may Transfer an Equity Interest or this Agreement to an immediate family member (i.e., spouse, children, parents, siblings) or to a trust for your benefit or the benefit of the Equity Owner or the Equity Owner's immediate family members.
12.2.1.2.3 Transfer on Death. On the death of Franchisee or an Equity Owner who is a natural person, this Agreement or the Equity Interest of the deceased Equity Owner may Transfer in accordance with such person's will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution of such person's estate, provided that: (a) the transfer on death is to an immediate family member or to a legal entity formed by such family member(s); and (b) within one (1) year after the death, such family member(s) or entity meet all of our then-current requirements for an approved Transferee.
12.2.2 Change of Ownership Transfer. A Change of Ownership Transfer is any Transfer that will result in a change of Control of you, the Hotel or the Hotel Site, or is not otherwise described in Subsection 12.2.1. We will have sixty (60) days from our receipt of the completed and signed franchise application to consent or withhold our consent to any proposed Change of Ownership Transfer. Our consent will not be unreasonably withheld. You consent to our communication with any third party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer. Our consent to the Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date of closing the Change of Ownership Transfer ("Closing"):
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, an Equity Interest can be transferred to an affiliate or, if the Equity Owner is a natural person as of the effective date, to an immediate family member or to a trust for the benefit of the Equity Owner or the Equity Owner's immediate family members.
Additionally, the Embassy Suites FDD states that upon the death of the franchisee or equity owner, the Equity Interest of the deceased Equity Owner may transfer in accordance with such person's will or the laws of intestacy governing the distribution of such person's estate. However, the transfer on death must be to an immediate family member or to a legal entity formed by such family member(s); and within one year after the death, such family member(s) or entity must meet all of Embassy Suites' then-current requirements for an approved Transferee.
Any transfer that results in a change of control of the franchisee, the hotel, or the hotel site, or is not otherwise described in Subsection 12.2.1, is considered a Change of Ownership Transfer. Embassy Suites has sixty days from receipt of the completed and signed franchise application to consent or withhold consent to any proposed Change of Ownership Transfer, and such consent will not be unreasonably withheld. Embassy Suites may communicate with any third party it deems necessary about the Hotel in order to evaluate the proposed Change of Ownership Transfer. Consent to the Change of Ownership Transfer is subject to certain conditions that must be satisfied at or before the date of closing the Change of Ownership Transfer.