Does Embassy Suites reserve the right to delegate its rights and responsibilities under the agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the following responsibilities to you under this Agreement. We reserve the right to fulfill some or all of these responsibilities through one of our Affiliates or through unrelated third parties, in our sole business judgment. We may require you to make payment for any resulting services or products directly to the provider.
- 4.1 Training. We may specify certain required and optional training programs and provide these programs at various locations. We may charge you for required training services and materials and for optional training services and materials we provide to you. You are responsible for selecting the personnel to attend such training programs. You are also responsible for all travel, lodging and other expenses you or your employees (or your Management Company's personnel) incur in connection with attending these programs.
- 4.2 Reservation Service. We will furnish you with the Reservation Service. The Reservation Service will be furnished to you on the same basis as it is furnished to other System Hotels, subject to the provisions of Subsection 13 below.
- 4.3 Consultation. We may offer consultation services and advice in areas such as operations, facilities, and marketing, but you will always remain responsible for hiring your employees and the terms and conditions of their employment. We may establish fees in advance, or on a project-by-project basis, for any consultation service or advice you request.
4.4 Marketing.
4.4.1 We will publish (either in hard copy or electronic form) and make available to the traveling public a directory that includes System Hotels. We will include the Hotel in advertising of System Hotels and in international, national and regional marketing programs in accordance with our general practice for System Hotels.
4.4.2 We will use your Monthly Program Fee to pay for various programs to benefit the System and/or the Network, including:
4.4.2.1 advertising, promotion, publicity, public relations, market research, and other marketing programs;
4.4.2.2 developing and maintaining directories of and Internet sites for System Hotels and/or Network Hotels;
4.4.2.3 developing and maintaining the Reservation Service systems and support; and
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, Embassy Suites retains the right to delegate its responsibilities under the franchise agreement. Specifically, Embassy Suites can fulfill its obligations through its Affiliates or unrelated third parties, using its sole business judgment to determine the extent of such delegation.
This delegation has practical implications for prospective Embassy Suites franchisees. For example, Embassy Suites may utilize third-party providers for services such as training, and franchisees may be required to make payments directly to these providers for the services or products rendered. While Embassy Suites may offer consultation services, the franchisee remains responsible for employment decisions and the terms of employment for their staff.
Embassy Suites also retains control over marketing programs, including advertising, directories, and reservation services. The fees collected from franchisees are used to fund these programs, which benefit the entire Embassy Suites system. However, franchisees should be aware that Embassy Suites' decision to delegate responsibilities to third parties is at its sole discretion, potentially impacting the consistency and quality of services provided.
Furthermore, the franchise agreement specifies that it is exclusively for the benefit of Embassy Suites and the franchisee, with the exception of rights assigned or delegated to Embassy Suites' Affiliates. These rights and covenants are enforceable by Embassy Suites' Affiliates or their successors and assigns, highlighting the franchisor's ability to involve its Affiliates in the franchise relationship.