Can Embassy Suites require me to participate in programs designed to refer prospective customers to other hotels, whether in the System or otherwise?

According to the 2025 Embassy Suites Franchise Disclosure Document, Embassy Suites can require franchisees to participate in programs designed to refer prospective customers to other hotels, even if those hotels are not part of the Embassy Suites system. The franchisee is generally expected to refer guests to other System Hotels and Network Hotels whenever reasonably possible, but Embassy Suites retains the right to mandate participation in broader referral programs. Franchisees are also required to display promotional materials for System Hotels and Network Hotels and limit advertising on their premises to only these hotels. This requirement is outlined in Paragraph 5.1.13 of the Franchise Agreement.

This means that as an Embassy Suites franchisee, you may be obligated to actively promote hotels that compete with your own, potentially diverting business away from your location. While the primary expectation is to refer customers within the Embassy Suites network, the franchisor has the authority to extend this obligation to include hotels outside the system. This could be part of a larger marketing strategy or partnership that Embassy Suites deems beneficial for the overall brand, even if it poses a direct competitive challenge to individual franchisees.

It is important for prospective franchisees to understand the scope and nature of these referral programs. Franchisees should inquire about the criteria used to select participating hotels, the potential impact on their own business, and any recourse they may have if they believe the referral program is detrimental to their hotel's performance. Understanding these obligations is crucial for assessing the potential risks and benefits of investing in an Embassy Suites franchise.