What is the name of the agreement that specifies that an Embassy Suites franchisee has no right to cure after termination?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement (“FA”), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| failure to operate is due to an Event of Force Majeure provided that you have taken reasonable steps to minimize the impact of such events; | ||
| FA §13.2 (7) | you contest in any court or proceeding our ownership of the System or any part of the System or the validity of any of the Marks; | |
| FA §13.2 (8) | you or any Equity Owner with a controlling Equity Interest, or any of your Affiliates, employees, or Management Company, engage in conduct that we reasonably determine is likely to adversely reflect upon or affect in any manner the reputation, goodwill, or business of the Hotel, the System, us and/or our Affiliates; | |
| FA §13.2 (9) | you conceal revenues, maintain false books and records of accounts, submit false reports or information to us or otherwise attempt to defraud us; | |
| FA §13.2 (10) | you Transfer any interest that is not in compliance with the Franchise Agreement; | |
| FA §13.2 (11) | you, your Affiliate or any Guarantor become a Sanctioned Person or are owned or controlled by a Sanctioned Person or otherwise breach the representations in the Franchise Agreement; | |
| FA §13.2 (12) | Information is disclosed involving you or your Affiliates, which, in our business judgment, is likely to adversely reflect on or affect in any manner, any gaming licenses or permits held by us or our affiliates or the then-current stature of us or any of our affiliates with any gaming commission, board, or similar governmental or regulatory agency; | |
| FA §13.2 (13) | any Guarantor breaches its guaranty to us; | |
| FA §13.2 (14) | a threat or danger to public health or safety results from the construction, maintenance, or operation of the hotel; | |
| FA §13.2 (15) | you, your Affiliate or a Guarantor become a Competitor except as otherwise permitted by Subsection 5.1.29; | |
| FA §13.2 (16) | any of Your Hotel Agreements is terminated based on a breach or default by you or your Affiliates; or | |
| FA Shared Facilities Addendum | if we withdraw our consent to your Hotel’s use of Shared Facilities and you fail to construct comparable facilities or amenities in order for the Hotel to meet the Standards. | |
| HITS Agreement | You have no right to cure once your Franchise Agreement terminates. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the agreement that specifies a franchisee has no right to cure after termination is the HITS Agreement. This means that once the Franchise Agreement is terminated, the franchisee cannot take any action to remedy the situation and reinstate the agreement.
This lack of a cure period in the HITS Agreement is a significant point for prospective Embassy Suites franchisees. Typically, franchise agreements allow a period for franchisees to correct breaches of the agreement before termination occurs. The absence of this right in the HITS Agreement means that termination is immediate and irreversible under the conditions of that agreement.
Prospective franchisees should carefully review the terms of the HITS Agreement and understand the implications of not having a cure period. This includes understanding what actions or inactions could lead to termination under the HITS Agreement and what recourse, if any, is available to them in such a situation. Consulting with a legal professional is advisable to fully grasp the potential risks associated with this provision.