What is the limitation on renovation requirements imposed by Franchisor in connection with the Assumption of an Embassy Suites franchise?

According to the 2025 Embassy Suites Franchise Disclosure Document, any renovation requirements that the franchisor imposes on a lender in connection with the assumption of a franchise will not exceed what Embassy Suites could have required if the original franchisee had remained in control. This limitation applies when a lender acquires possession or ownership of the hotel and assumes the franchise agreement.

This provision protects the lender, who is stepping into the shoes of the franchisee, from being subjected to more stringent renovation demands than the original franchisee would have faced. It ensures that the lender is not unfairly burdened with excessive or unexpected costs related to property improvements. The lender is only responsible for the renovations that would have been required anyway under the existing franchise agreement.

For a prospective Embassy Suites franchisee, this clause provides some assurance that if their lender assumes the franchise, the renovation requirements will be reasonable and predictable. It aligns the lender's obligations with the original terms of the franchise agreement, preventing the franchisor from imposing additional or accelerated renovation demands simply because of the change in control. This can help in maintaining the value and viability of the franchise during and after a transfer to a lender.