Can Embassy Suites reduce the Incentive disbursement by amounts owed to them or their affiliates?

According to Embassy Suites's 2025 Franchise Disclosure Document, Embassy Suites has the right to reduce the amount of the Incentive they disburse to a franchisee. This reduction can be made by any amount that the franchisee or their affiliates owe to Embassy Suites or its affiliates. This reduction in the incentive disbursement will not affect the calculation of the amount repayable to Embassy Suites.

This clause in the franchise agreement means that if a prospective Embassy Suites franchisee or any affiliated business has outstanding debts to Embassy Suites or its related companies, these debts can be offset against the incentive amount that the franchisee is due to receive. This could significantly reduce the initial financial assistance a new franchisee anticipates, potentially impacting their startup capital and financial planning.

It is important for prospective Embassy Suites franchisees to be aware of this provision and to ensure that all financial obligations to Embassy Suites and its affiliates are clear and up-to-date before the incentive is disbursed. Franchisees should seek clarification on any potential offsets and factor this into their financial projections. This is a fairly standard practice in franchising, as it protects the franchisor's financial interests and ensures that outstanding debts are addressed promptly.