What is prohibited regarding competition for an Embassy Suites franchisee or their affiliates, as defined by STR, LLC?

According to Embassy Suites's 2025 Franchise Disclosure Document, franchisees and their affiliates are prohibited from becoming a Competitor in the specified hotel market segments as determined by STR, LLC. Specifically, the franchisee cannot become a Competitor, or permit their Affiliate to become a Competitor, in the luxury (for CI, OL), upper upscale (for GU, PY, ES, HFS, QQ), upscale (for DT, HGI, HWS, PO, UP), upper midscale (for HAM, HIS, H2, UAB), midscale (for EY, RU), or economy (for PE) hotel market segment, or any substantially equivalent market segment. STR, LLC, or its successor, is the entity that determines these market segments.

This restriction prevents Embassy Suites franchisees from directly competing with the brand by operating or being involved with competing hotel brands within the same market segment. The definition of "Competitor" includes owning, licensing, or franchising a Competing Brand. However, it excludes being a franchisee of a Competing Brand, managing a Competing Brand hotel (unless as the exclusive manager), or owning a minority interest without holding a position of influence.

Furthermore, for certain franchise agreements (OL, QQ, UP), the franchisee must ensure that neither they nor their Affiliates allow any Competitor to use the Embassy Suites's Marks without prior written approval. This clause protects the brand's trademarks and prevents unauthorized use by competitors, reinforcing the non-compete provisions. This ensures that the brand maintains its distinct identity and market position, preventing confusion or dilution of the brand's value.