What is the required action for the franchisee (or affiliate) to maintain Embassy Suites' consent for shared facilities?
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) | |||
| experience, or the goodwill and reputation of the Brand and/or the Marks; | |||
| 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; | ||
| d) | You Transfer a controlling Equity Interest in you, the Hotel Site, or the Agreement, without simultaneously selling, leasing, assigning, or Transferring a controlling Equity Interest in you (or your Affiliate controlling [Hotel #2] Hotel), the [Hotel #2] Hotel Site, or the [Hotel #2] Agreement, to the same transferee or a transferee under common control with such transferee. Any Transfers are subject to the Transfer provisions of the Agreement. Failure to comply with the Transfer provisions is a material breach of the Agreement. |
If we withdraw our consent pursuant to this paragraph, to the extent that the Shared Facilities are part of Standards, you shall immediately make arrangements to either procure the Shared Facilities, or to construct comparable facilities and amenities, for the exclusive use of the Hotel. Your failure to procure the Shared Facilities or construct comparable facilities and amenities to meet Standards is deemed to be a default that may result in the termination of the Agreement. If the Shared Facilities are no longer a part of the Hotel, you are responsible for immediately removing any Marks or distinctive System features associated with the Brand from any of the Shared Facilities that are accessible to or visible by Hotel guests, and removing all other indicia that the Hotel had joint possession or use of the Shared Facilities with the [Hotel #2] Hotel.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, if an Embassy Suites hotel shares facilities with another hotel, maintaining Embassy Suites' consent for this arrangement requires the franchisee (or their affiliate) to execute a Shared Facilities Addendum with the same terms as the original addendum for the other hotel's franchise agreement. This addendum ensures both hotels adhere to consistent standards and operational guidelines for the shared facilities.
Embassy Suites expressly reserves the right to withdraw consent for the shared facilities arrangement under certain conditions. These conditions include if the shared facilities fail to meet the System Standards outlined in the franchise agreement or the agreement of the other hotel, or if either franchise agreement is terminated for any reason. Additionally, consent may be withdrawn if the franchisee transfers a controlling equity interest in the Embassy Suites hotel without simultaneously transferring a similar interest in the other hotel to the same transferee or a transferee under common control.
If Embassy Suites withdraws its consent, the franchisee must immediately arrange to either procure the shared facilities independently or construct comparable facilities exclusively for the Embassy Suites hotel. Failure to do so is considered a default that may lead to the termination of the franchise agreement. Furthermore, if the shared facilities are no longer part of the hotel, the franchisee is responsible for removing any Embassy Suites branding or distinctive system features from the shared facilities that are accessible or visible to hotel guests, as well as removing any other indications of joint use with the other hotel.