Can the Embassy Suites maker prepay the Development Incentive Note, and are there any penalties?

According to the 2025 Embassy Suites Franchise Disclosure Document, the Maker of the Development Incentive Note has the right to prepay the note, either in whole or in part, at any time. This prepayment can be made without incurring any premium or penalty. However, the FDD specifies that any amounts paid or prepaid cannot be re-disbursed. This means that once a payment is made towards the note, those funds cannot be borrowed again or withdrawn.

Embassy Suites states that prepayments of principal will be applied without any notation on the note itself. Furthermore, the Maker's obligation to pay the note is absolute and unconditional, requiring all payments to be made without any setoff, deduction, offset, recoupment, or counterclaim. This ensures that the payments are made in full without any reductions for other potential claims or disputes.

This clause provides flexibility for the Maker to manage their debt obligations efficiently, allowing for early repayment without penalties, which is a favorable term for the franchisee. However, it's important to note that the funds, once prepaid, cannot be re-borrowed, and all payments must be made without any deductions, ensuring a straightforward repayment process.