Can Embassy Suites refuse to approve a Competitor to manage my Hotel?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, you may not be a Competitor (defined below) and we reserve the right to not approve a Competitor, or any entity that is the exclusive manager for a Competitor through itself or an affiliate, to manage your Hotel. If your Management Company becomes a Competitor, you will have 90 days to retain a qualified substitute Management Company that we approve.
A "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 by the Competitor under such Competing Brand. 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; or (iii) owns a minority interest in a Competing Brand, so long as neither that individual or entity nor any of its affiliates is an officer, director, or employee of the Competing Brand, or exercises, or has the right to exercise, control over the business decisions of the Competing Brand. A "Competing Brand" means a hotel brand or trade name that, in our sole business judgment, competes with the System or any Network Hotel.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 74–75)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, Embassy Suites retains the right to not approve a Competitor, or any entity that is the exclusive manager for a Competitor through itself or an affiliate, to manage your Hotel. A "Competitor" is defined as any individual or entity that owns, in whole or in part, or is the licensor or franchisor of, a Competing Brand, regardless of the number of hotels they own, license, or franchise under that Competing Brand. A "Competing Brand" is a hotel brand or trade name that Embassy Suites, in its sole business judgment, considers to be a competitor to the Embassy Suites system or any Network Hotel.
However, the definition of "Competitor" excludes certain entities. Specifically, an individual or entity that is a franchisee of a Competing Brand is not considered a Competitor. Similarly, an individual or entity that manages a Competing Brand hotel is not a Competitor, as long as they are not the exclusive manager of that Competing Brand. Also excluded is an individual or entity that owns a minority interest in a Competing Brand, provided that neither they nor their affiliates are an officer, director, or employee of the Competing Brand, or have control over the business decisions of the Competing Brand.
If your current Management Company becomes a Competitor, you will have 90 days to find a qualified substitute Management Company that Embassy Suites approves. This condition ensures that the management of your Embassy Suites hotel remains independent and does not promote or favor competing hotel brands, maintaining the integrity and standards of the Embassy Suites system.