Is opening the Embassy Suites hotel before the opening date considered a breach of the agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ct, general contractor or other certified professional provides us with a certificate stating that the as-built premises comply with all Laws relating to accessibility/accommodations/facilities for those with disabilities;
- 6.4.3.2 you have complied with all the terms and conditions in this Agreement;
- 6.4.3.3 your staff has received adequate training and instruction in the manner
we require;
- 6.4.3.4 you have received authorization to open the Hotel from the relevant governmental authority for the jurisdiction in which the Hotel is located, if applicable; and
- 6.4.3.5 all fees and charges you owe to us or our Affiliates have been paid.
- 6.4.4 Opening the Hotel before the Opening Date is a material breach of this Agreement.
- 6.4.4.1 You will pay us Liquidated Damages in the amount of Five Thousand Dollars ($5,000) per day if you op
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, opening the hotel before the designated opening date constitutes a material breach of the franchise agreement. Specifically, Embassy Suites requires written consent before the franchisee can open the hotel. The franchisee must provide at least 15 days' advance notice that they have met all agreement terms and the hotel is ready to open. Embassy Suites will then assess whether to authorize the opening.
If a franchisee opens an Embassy Suites hotel before the approved opening date, they will incur liquidated damages. The franchisee is obligated to pay Embassy Suites $5,000 per day for each day the hotel is open before the official opening date. This fee is intended to compensate Embassy Suites for damages resulting from the breach. Additionally, the franchisee is responsible for reimbursing Embassy Suites for all costs and expenses, including legal fees, associated with enforcing their rights under the agreement due to the early opening.
The liquidated damages do not exclude any other legal remedies Embassy Suites may pursue. The FDD emphasizes that these damages represent a reasonable estimate of the minimum compensation for the harm caused by opening the hotel prematurely. This underscores the importance of adhering to the agreed-upon opening date and obtaining explicit written consent from Embassy Suites to avoid substantial financial penalties and potential legal action.