What is the purpose of the 'Change of Ownership Application' when transferring an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ng, books and records, and internal controls laws.
- "Brand" means the brand name set forth in the Addendum.
- "Chain Code" means the code that we use to identify the Brand within our Reservation Service. We may modify, remove, or replace the Chain Code for the Brand at any time in our discretion.
- "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.
- "Competing Brand" means a hotel brand or trade name that, in our sole business judgment, competes with the System, or any System Hotel or Network Hotel.
- "Competitor" means any individual or entity that, at any time during the Term, whether directly or through an Affiliate, owns in whole or in part, or is the licensor or franchisor of a Competing Brand, irrespective of the number of hotels owned, licensed or franchised under such Competing Brand name. A Competitor does not include an individual or entity that: (i) is a franchisee of a Competing Brand; (ii) manages a Competing Brand hotel, so long as the individual or entity is not the exclusive manager of the Competing Brand;
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the 'Change of Ownership Application' is a key step when a franchisee seeks to transfer their franchise to a new owner in what is termed a 'Change of Ownership Transfer'. This type of transfer involves a change in control of the franchisee, the hotel, or the hotel site. The application itself is submitted either by the current franchisee or the prospective new franchisee, referred to as the 'Transferee'.
The Embassy Suites franchise agreement stipulates that the Transferee must submit a completed and signed Change of Ownership Application to initiate the transfer process. Along with the application, the Transferee is required to pay the then-current franchise application fee and execute the then-current form of the franchise agreement, including all necessary ancillary documents. This ensures that the new franchisee is formally applying for and agreeing to the terms of the franchise.
The successful submission and approval of the Change of Ownership Application is critical because the closing date of the transfer marks the termination of the existing franchisee's agreement and the commencement of the new franchisee's agreement. Embassy Suites has 60 days from receipt of the completed application to either approve or deny the proposed transfer. The franchisor's consent is subject to several conditions that must be met before the transfer can be finalized, including ensuring the Transferee meets the current business requirements for new franchisees and that all outstanding fees and obligations are settled.