What is the scope of 'Anti-Corruption Laws' that apply to an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The following capitalized terms will have the meanings set forth after each term:
- "Affiliate" means any natural person or firm, corporation, partnership, limited liability company, association, trust or other entity which, directly or indirectly, Controls, is Controlled by, or is under common Control with, the subject entity.
- "Agreement" means this Franchise Agreement, including any exhibits, attachments and addenda.
- "Anti-Corruption Laws" means all applicable anti-corruption, anti-bribery, anti-money laundering, books and records, and internal controls laws.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, 'Anti-Corruption Laws' encompass all applicable anti-corruption, anti-bribery, anti-money laundering, books and records, and internal controls laws. This definition is broad, covering a wide range of legal and regulatory requirements designed to prevent illicit financial activities and ensure transparency in business operations.
For a prospective Embassy Suites franchisee, this means that compliance with these laws is not limited to avoiding direct acts of bribery or corruption. It also includes implementing robust internal controls to prevent money laundering, maintaining accurate books and records, and ensuring that all financial transactions are transparent and compliant with applicable regulations. The franchisee must ensure that neither they, nor any person having control over them or the hotel, has made any improper payment or engaged in acts that violate anti-corruption laws, both when entering the agreement and during its performance.
Embassy Suites emphasizes the importance of adhering to these laws by requiring franchisees to make ongoing representations, warranties, and covenants related to anti-corruption. Franchisees must also assure that their appointed agents, including any management company, comply with these requirements. Furthermore, franchisees are obligated to notify Embassy Suites immediately if any event occurs that would render their representations and warranties incorrect.
Embassy Suites retains the right to investigate potential non-compliance, requiring franchisees to cooperate with information requests, provide documentation, and permit inspections of relevant books and records. Failure to comply with these anti-corruption laws can have significant consequences, including potential legal penalties and termination of the franchise agreement. Therefore, it is crucial for prospective franchisees to fully understand and implement comprehensive compliance measures.