Can the lender assign the letter agreement without the written consent of Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Assignment.
This letter agreement may not be assigned by Lender without the written consent of Franchisor; provided, however, Franchisor's consent is not required for any assignment to:
(a) a direct or indirect subsidiary or affiliate of Lender in connection with an Acquisition.
(b) the trustee in a securitization if Lender (i) directly transfers the Loan to the trustee and (ii) gives notice to Franchisor within thirty (30) days of the transfer, identifying the new "Lender" and the new address for notice.
If Lender fully complies with the provisions of this Subparagraph, Franchisor will recognize the trustee as "Lender" under this letter agreement; but Franchisor may, in its discretion, reject any notice that is not sent by Lender or that is not sent in a timely manner in accordance with this Subparagraph.
- (c) [IF LENDER IS ACTING AS AN ADMINISTRATIVE AGENT:] any successor administrative agent with respect to the Loan if the successor is a national bank, a state-chartered bank, commercial bank, or the U.S. branch of a foreign bank authorized to operate in the U.S., and the administrative agent identified as "Lender" under this letter agreement gives notice to Franchisor, identifying the new "Lender" and the new address for notice, within thirty (30) days of the transfer, but Franchisor may, in its discretion, reject any notice that is not sent by Lender or that is not sent in a timely manner in accordance with this Subparagraph.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the lender generally cannot assign the letter agreement without Embassy Suites's written consent. However, there are exceptions where Embassy Suites's consent is not required. These exceptions include assignments to a direct or indirect subsidiary or affiliate of the lender in connection with an acquisition.
Another exception is for assignments to a trustee in a securitization, provided that the lender directly transfers the loan to the trustee and gives notice to Embassy Suites within thirty days of the transfer. The notice must identify the new lender and the new address for notice. If the lender complies with these provisions, Embassy Suites will recognize the trustee as the new lender under the agreement. However, Embassy Suites retains the discretion to reject any notice that is not sent by the original lender or is not sent in a timely manner.
Finally, if the lender is acting as an administrative agent, the agreement can be assigned to any successor administrative agent that is a national bank, a state-chartered bank, commercial bank, or the U.S. branch of a foreign bank authorized to operate in the U.S. The administrative agent identified as the lender must give notice to Embassy Suites within thirty days of the transfer, identifying the new lender and the new address for notice. Similar to the securitization scenario, Embassy Suites may reject any notice that is not properly sent or is not timely.