What is the purpose of the Change of Ownership Application for an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Change of Ownership Application" means the application that is submitted to us by you or the Transferee for a new franchise agreement in connection with a Change of Ownership Transfer.
- "Change of Ownership Transfer" means any proposed Transfer that results in a change of Control of Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by this Agreement, all as set out in Subsection 12.2.2.
12.2.2 Change of Ownership Transfer. A Change of Ownership Transfer is any Transfer that will result in a change of Control of you, the Hotel or the Hotel Site, or is not otherwise described in Subsection 12.2.1. We will have sixty (60) days from our receipt of the completed and signed franchise application to consent or withhold our consent to any proposed Change of Ownership Transfer. Our consent will not be unreasonably withheld. You consent to our communication with any third party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer. Our consent to the Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date of closing the Change of Ownership Transfer ("Closing"):
12.2.2.1 Transferee submits a completed and signed Change of Ownership Application, pays our then-current franchise application fee, executes our then-current form of franchise agreement, and all required ancillary documents. If all conditions to our consent are fulfilled, the date of Closing will be the termination date of this Agreement, and the effective date of Transferee's franchise agreement;
12.2.2.2 you are not in default of this Agreement or any other agreements with
us or our Affiliates;
12.2.2.6 Transferee meets our then-current business requirements for new
franchisees; and
12.2.2.7 Transferee agrees to indemnify, hold harmless, and defend us and our Affiliates against any inquiry, investigation, suit, action, or proceeding arising out of or in connection with any fees or costs charged to patrons or guests by you.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, a "Change of Ownership Application" is required when there is a proposed transfer that results in a change of control of the franchisee, the hotel, or the hotel site. This application is submitted to Embassy Suites either by the current franchisee or the prospective new franchisee when seeking a new franchise agreement in connection with such a transfer. This type of transfer is termed a "Change of Ownership Transfer."
Embassy Suites must receive a completed and signed franchise application to consider the transfer. The brand has 60 days from receipt of this application to either approve or deny the proposed transfer. Embassy Suites states that their consent will not be unreasonably withheld. As part of the review process, Embassy Suites is allowed to communicate with any third party it deems necessary to evaluate the proposed change.
Several conditions must be met before the change of ownership can be finalized. The prospective new franchisee must submit a completed application, pay the current franchise application fee, and execute the current franchise agreement along with all required ancillary documents. The current franchisee must not be in default of any agreements with Embassy Suites or its affiliates and must pay all outstanding amounts due to Embassy Suites up to the closing date. The new franchisee must also meet Embassy Suites' then-current business requirements for new franchisees and agree to indemnify Embassy Suites against any claims arising from the previous owner's operations.