When must the lender notify the Embassy Suites Franchisor after an Acquisition has occurred?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- Notice to Franchisor. Lender agrees to notify Franchisor (a) contemporaneously with the commencement of any action that may result in an Acquisition; (b) contemporaneously with the filing of a petition for appointment of a receiver or any other action initiated by Lender that materially impacts possession of the Hotel; (c) promptly after an Acquisition of the date the Acquisition occurred, or (d) promptly after Lender no longer has a security interest in the equity ownership of Franchisee or the Loan is paid in full, but Lender's failure to give notice under this Subparagraph 3(d) will not affect the automatic termination of this letter agreement under Paragraph 11 [NO ESTOPPEL] 12 [ESTOPPEL]. Lender further agrees to promptly provide to Franchisor a copy of any order appointing a receiver or any other judicial or administrative order from an action initiated by Lender that materially impacts possession of the Hotel. All notices to Franchisor should be sent to the following address or such other address periodically designated by Franchisor in writing:
Hilton Worldwide Holdings Inc. Attention: General Counsel 7930 Jones Branch Drive, Suite 1100 McLean, VA 22102
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, a lender who acquires possession or ownership of a hotel must notify the franchisor promptly after the acquisition date. This notification requirement is part of the Mezzanine Lender Comfort Letter, which outlines the rights and responsibilities of the lender and franchisor in the event of a hotel acquisition.
Specifically, the lender must inform the franchisor contemporaneously with the commencement of any action that may result in an Acquisition, contemporaneously with the filing of a petition for appointment of a receiver or any other action initiated by Lender that materially impacts possession of the Hotel and promptly after an Acquisition of the date the Acquisition occurred. This ensures that Embassy Suites is kept informed of any changes in ownership or control of the hotel, allowing them to protect their brand and ensure compliance with the franchise agreement.
Furthermore, the lender is also required to provide a copy of any order appointing a receiver, or any other judicial or administrative order from an action initiated by the lender that materially impacts possession of the Hotel. All notices to Franchisor should be sent to the specified address. This proactive communication helps Embassy Suites monitor the status of the hotel and take appropriate action if necessary. Failure to provide timely notice under certain subparagraphs does not affect the automatic termination of the letter agreement.