What are the requirements for operating an Embassy Suites Hotel, regarding management?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You must provide qualified and experienced management for the operation of your Hotel. To fulfill this responsibility, your Hotel must be operated either by you or a third-party management company ("Management Company") that we have approved. No other person or entity may operate the Hotel.
We will only grant approval when we consider you or your proposed Management Company to be qualified to manage the Hotel. We may refuse to approve you or any proposed Management Company that, in our reasonable business judgment, is inexperienced or unqualified in managerial skills or operating capacity or capability, or is unable to adhere fully to the obligations and requirements of the Franchise Agreement.
If you wish to manage your Hotel directly, you must have our prior written approval and successfully complete our training program, unless we waive this requirement. If we determine that you are not qualified to operate the Hotel, at any time, we may require you to retain a Management Company that is acceptable to us to manage the Hotel.
If you wish to hire or are required to hire a Management Company to manage your Hotel, you must obtain our prior written approval. Your Management Company must have the authority to perform all of your obligations under the Franchise Agreement, including all indemnity and insurance obligations. After we approve the Management Company, we can require the general manager and other personnel, such as the director of sales, to attend training programs that pertain to the operational functions of the Hotel related to those roles as are necessary to meet our Brand Standards. If your Management Company resigns or is terminated by you, or otherwise becomes unsuitable or unqualified to operate the Hotel as determined by us, in our sole judgment, you must retain a new Management Company that is acceptable to us within 90 days.
You are solely responsible for the management and operation of your Hotel at all times, regardless of whether you are an individual, corporation, limited liability company, partnership or other entity. Your engagement of a Management Company does not reduce your obligations under the Franchise Agreement. We may communicate directly with your managers and Management
Company, and we have the right to rely on their communications to us as being on made your behalf.
We will not require you or your Management Company to sign an agreement not to compete with us after the Franchise Agreement terminates or expires. However, you may not engage, directly or indirectly, in any cross-marketing or cross-promotion of your Hotel with any other hotel, motel or related business without our prior written consent, except for System Hotels or Network Hotels. You and your Management Company must not copy or disclose any confidential or proprietary materials without our prior written consent.
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, franchisees must provide qualified and experienced management for their hotel's operation. This can be achieved either through direct management by the franchisee or by hiring an approved third-party management company. Embassy Suites retains the right to approve or disapprove of both the franchisee's ability to manage the hotel directly and any proposed management company.
If a franchisee wishes to manage the hotel themselves, they must obtain prior written approval from Embassy Suites and successfully complete their training program, unless this requirement is waived. However, Embassy Suites can mandate that a franchisee hire an approved management company if they determine the franchisee is not qualified to operate the hotel. If a management company is hired, it must have the authority to fulfill all of the franchisee's obligations under the Franchise Agreement, including indemnity and insurance obligations. Embassy Suites may also require the general manager and other personnel, such as the director of sales, to attend training programs.
The franchisee remains solely responsible for the hotel's management and operation at all times, regardless of whether they manage it directly or through a management company. Embassy Suites reserves the right to communicate directly with the franchisee's managers and management company and rely on their communications. Furthermore, franchisees and their management companies are restricted from cross-marketing or cross-promoting the Embassy Suites hotel with any other hotel, motel, or related business without prior written consent, except for System Hotels or Network Hotels.
Embassy Suites also stipulates that franchisees cannot engage a management company that is a 'Competitor,' defined as an entity that owns, licenses, or franchises a competing hotel brand. If a management company becomes a Competitor, the franchisee has 90 days to find a qualified replacement approved by Embassy Suites. These stipulations ensure that the management of each Embassy Suites hotel aligns with the brand's standards and strategic interests, and that the quality of service is maintained.