What is the '[Insert Brand #2] Agreement' that Embassy Suites refers to?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| You and we are parties to a franchise agreement dated ("Agreement"), which provides, among other things, for the operation of the (proposed) [insert Hotel #1 name] hotel located or to be located at [Insert Hotel #1 address ("Hotel"). | |||
|---|---|---|---|
| You (or your Affiliate) and we are also parties to a franchise agreement dated] ("[Insert | |||
| Brand #2] Agreement") for the operation of the (proposed) [Insert Hotel #2 name] hotel | |||
| located or to be located at [Insert Hotel #2 address ("Insert Brand #2 Hotel"). | |||
| [or, will be] | You requested that the Hotel and the [Insert Hotel #2] Hotel (collectively, "Sharing Hotels"), which are | ||
| [Select: part of the same building structure or located in buildings adjacent to one another] be | |||
| permitted to jointly utilize certain shared hotel facilities and offer to their guests the use of certain shared | |||
| amenities ("Shared Facilities") in accordance with the terms of this Addendum ("Shared Facilities | |||
| Arrangement"). | |||
| For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, you | |||
| and we agree that the following provisions are incorporated into and made a part of the Agreement: | |||
| 1) | We give our consent for the Hotel and the [Hotel #2] Hotel to jointly utilize the Shared Facilities | ||
| identified during our review and approval of the Plans and Designs for the Hotel and the [Hotel #2] | |||
| Hotel. | |||
| 2) | Our consent is contingent upon you (or your Affiliate) executing a Shared Facilities Addendum to | ||
| the [Hotel #2]Agreement on the same terms contained in this Addendum. | |||
| 3) | We expressly reserve the right to withdraw our consent and, on notice, require you to discontinue | ||
| the Shared Facilities Arrangement if: | |||
| a) | |||
| we determine that such participation is detrimental to the operation of the Hotel, the guest |
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the '[Insert Brand #2] Agreement' refers to a franchise agreement between the franchisee (or their affiliate) and Embassy Suites for operating another hotel, identified as '[Insert Hotel #2 name],' at a specific location, '[Insert Hotel #2 address.' This agreement becomes relevant when Embassy Suites permits two hotels, the primary '[Insert Hotel #1 name]' hotel and the '[Insert Hotel #2]' hotel, to share facilities.
The document specifies that this arrangement for shared facilities requires a Shared Facilities Addendum to be added to both the primary franchise agreement and the '[Insert Brand #2] Agreement.' This addendum ensures that both hotels operate under consistent terms regarding the shared amenities. Embassy Suites retains the right to withdraw consent for the shared facilities if the arrangement negatively impacts the operation of the primary hotel.
For a prospective Embassy Suites franchisee, this clause is particularly important if they are considering operating multiple hotels in close proximity to each other. The Shared Facilities Addendum ensures that all parties are aligned on the usage and maintenance of shared amenities, which can impact operational efficiency and guest satisfaction. It also highlights the potential risk that Embassy Suites can revoke the shared arrangement if it proves detrimental to one of the hotels, which could affect the business model and revenue projections.
This type of clause is not uncommon in franchise agreements, especially in the hospitality industry where franchisees might operate multiple locations under the same brand or related brands. It allows the franchisor to maintain quality control and brand consistency across different properties while providing flexibility for franchisees to optimize their operations through shared resources.