What is the permitted transfer fee for the Embassy Suites franchise agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
nd Lender.
- (d) Expiration of Franchise Agreement. Nothing in this letter agreement will extend the Franchise Agreement beyond its stated expiration date.
- (e) Receiver Appointment. If a receiver is appointed to operate the Hotel at the request of Lender, Franchisor may require the receiver to enter into Franchisor's the
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, in the event of an acquisition where a lender assumes the rights and obligations of the franchisee, the lender will pay a processing fee in lieu of a transfer or application fee. This processing fee is equivalent to the permitted transfer fee outlined in the Franchise Agreement. However, if the Franchise Agreement does not specify a permitted transfer fee, the processing fee will be $5,500.
This means that if a franchisee's lender takes over the hotel due to an acquisition, the lender will generally need to pay Embassy Suites a $5,500 processing fee. This fee covers Embassy Suites's costs for processing the transfer and ensuring the new operator meets their standards. This is in place of a typical transfer fee, which would normally apply when a franchisee sells or transfers their franchise to a new owner.
It is important to note that the transfer provisions of the Franchise Agreement will apply to any subsequent sale, assignment, or transfer by the lender to a third party after the initial assumption. This includes the requirement for a change of ownership application, approval of the third party, and payment of an application fee at that time. Therefore, the $5,500 fee only applies to the initial transfer to the lender, not to any later transfers by the lender to another party.