What section of the Embassy Suites Franchise Agreement discusses approval of 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. | |
| l. Our approval of transfer by you | FA §12.2 | A Transfer of any interest in you, the Hotel, the Hotel Site, or the Franchise Agreement (or any rights or obligations under it) are prohibited unless expressly allowed in the Franchise Agreement. The Franchise Agreement allows 2 types of Transfers if certain conditions are satisfied: (a) Permitted Transfers; and (b) Change of Ownership Transfers. In any Transfer, the proposed Transferee may not be a Sanctioned Person or a Competitor. |
| HITS Agreement 2.1 | You have no right to assign the HITS Agreement. If there is a | |
| Change of Ownership transfer of the Franchise Agreement, we | ||
| may permit the HITS Agreement to be assigned. | ||
| m. Conditions for | FA §12.2.1 | Permitted Transfers are Transfers that will not result in a change |
| our approval of | of Control of you, the Hotel, or the Hotel Site. | |
| transfer. |
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 approval of transfer by a franchisee is detailed in Section 12.2 of the Franchise Agreement. Item 17 provides a summary of this section, noting that any transfer of interest in the franchisee, the hotel, the hotel site, or the Franchise Agreement itself is prohibited unless expressly allowed within the agreement.
The Franchise Agreement outlines two types of transfers that may be permissible if certain conditions are met: Permitted Transfers and Change of Ownership Transfers. However, any proposed transferee cannot be a Sanctioned Person or a Competitor.
Permitted Transfers, as detailed in FA Section 12.2.1, are those that do not result in a change of control of the franchisee, the hotel, or the hotel site. Certain types of Permitted Transfers, such as transfers of Publicly Traded Equity Interests, privately held Equity Interests under 50% without a change of control, and interests within designated institutional investment funds (where the asset manager remains the same), can be completed without notice to or consent from Embassy Suites. Other Permitted Transfers require 60 days' written notice and Embassy Suites' consent unless they qualify under section 12.2.1.1.