What section of the Embassy Suites Franchise Agreement defines 'transfer' by the franchisee?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement ("FA"), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| return all copies of the eforea spa Manual, cancel all assumed | ||
| name or equivalent registrations and transfer any domain name | ||
| listings and registrations that contain any reference to the eforea | ||
| name to us, and cease representing yourself or the hotel as then | ||
| or formerly operating an eforea spa. | ||
| HITS Agreement 4.2 | You must stop using our software and related documents, return | |
| all copies to us, and certify to us that you have done so. | ||
| j. Assignment of contract by us | FA §12.1 | We may assign or transfer the Franchise Agreement and any of our rights, duties or assets to any person or entity without your consent so long as the assignee assumes all of our obligations to permit you to operate the Hotel. |
| HITS Agreement 2.1 | HSS may delegate its operational responsibilities under the | |
| HITS Agreement to third parties but remains responsible. | ||
| k. "Transfer" by you – definition | FA §§1 and 12.2 | Any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest, including a transfer of an interest the hotel, the Franchise Agreement, the site on which the hotel is located or any direct or indirect Equity Interest (as defined in the Franchise Agreement). You may not transfer to a Competitor or a Sanctioned Person. |
| HITS Agreement – Not applicable | Transfer is not defined in the HITS Agreement. We consider any attempt on your part to transfer or assign any of your rights or obligations under the HITS Agreement to be a "transfer" by you. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the definition of 'transfer' by the franchisee is detailed in FA §§1 and 12.2 of the Franchise Agreement. The term encompasses any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest. This includes transfers of interest in the hotel itself, the Franchise Agreement, the site where the hotel is located, or any direct or indirect Equity Interest as defined within the Franchise Agreement.
For a prospective Embassy Suites franchisee, this definition is crucial because it outlines the various scenarios that would be considered a transfer requiring franchisor oversight or approval. It is important to note that transfers to a Competitor or a Sanctioned Person are prohibited outright.
The FDD also clarifies that the HITS Agreement does not define 'transfer,' but the franchisor considers any attempt to transfer or assign rights or obligations under the HITS Agreement as a transfer. This broad definition ensures that any change in ownership or control is subject to the franchisor's review and approval, maintaining brand consistency and protecting the integrity of the Embassy Suites system.
Embassy Suites requires adherence to specific procedures for any transfer, as detailed further in FA §12.2, which discusses permitted transfers and change of ownership transfers. Understanding these sections is essential for franchisees planning future business transitions.