What is the purpose of the Shared Facilities Addendum to the Embassy Suites Franchise Agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| You and we are parties to a franchise agreement dated ("Agreement"), which provides, among other things, for the operation of the (proposed) [insert Hotel #1 name] hotel located or to be located at [Insert Hotel #1 address ("Hotel"). | |||
|---|---|---|---|
| You (or your Affiliate) and we are also parties to a franchise agreement dated] ("[Insert | |||
| Brand #2] Agreement") for the operation of the (proposed) [Insert Hotel #2 name] hotel | |||
| located or to be located at [Insert Hotel #2 address ("Insert Brand #2 Hotel"). | |||
| [or, will be] | You requested that the Hotel and the [Insert Hotel #2] Hotel (collectively, "Sharing Hotels"), which are | ||
| [Select: part of the same building structure or located in buildings adjacent to one another] be | |||
| permitted to jointly utilize certain shared hotel facilities and offer to their guests the use of certain shared | |||
| amenities ("Shared Facilities") in accordance with the terms of this Addendum ("Shared Facilities | |||
| Arrangement"). | |||
| For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, you | |||
| and we agree that the following provisions are incorporated into and made a part of the Agreement: | |||
| 1) | We give our consent for the Hotel and the [Hotel #2] Hotel to jointly utilize the Shared Facilities | ||
| identified during our review and approval of the Plans and Designs for the Hotel and the [Hotel #2] | |||
| Hotel. | |||
| 2) | Our consent is contingent upon you (or your Affiliate) executing a Shared Facilities Addendum to | ||
| the [Hotel #2]Agreement on the same terms contained in this Addendum. | |||
| 3) | We expressly reserve the right to withdraw our consent and, on notice, require you to discontinue | ||
| the Shared Facilities Arrangement if: | |||
| a) | |||
| we determine that such participation is detrimental to the operation of the Hotel, the guest |
- b) any of the Shared Facilities fail to meet System Standards as set forth under the Agreement and/or the [Hotel #2] Agreement;
- c) either the Agreement or the [Hotel #2] Agreement is terminated for any reason;
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the Shared Facilities Addendum to the Franchise Agreement outlines the terms and conditions under which an Embassy Suites hotel can jointly utilize certain shared hotel facilities and amenities with another hotel. This arrangement is applicable when the Embassy Suites and another hotel, referred to as "[Hotel #2] Hotel", are either part of the same building structure or located in adjacent buildings. The addendum allows these hotels to offer shared facilities to their guests, subject to Embassy Suites's approval.
The addendum requires that the franchisee (or their affiliate) also execute a Shared Facilities Addendum to the [Hotel #2] Agreement on the same terms. Embassy Suites retains the right to withdraw consent for the Shared Facilities Arrangement if it determines that the arrangement is detrimental to the operation of the Embassy Suites hotel or the guest experience, or if the shared facilities fail to meet the brand's System Standards. Furthermore, the termination of either the Embassy Suites agreement or the [Hotel #2] Agreement for any reason would also terminate the Shared Facilities Arrangement.
This addendum has significant implications for franchisees considering such arrangements. It ensures that both hotels adhere to consistent standards and protects the Embassy Suites brand's reputation. If Embassy Suites withdraws its consent, the franchisee must either procure the shared facilities independently or construct comparable facilities for the exclusive use of the Embassy Suites hotel. Failure to do so can result in a default under the Franchise Agreement, potentially leading to termination. The franchisee is also responsible for removing any Embassy Suites branding from the shared facilities if the arrangement is discontinued.