What is the significance of the 'Effective Date' in the Embassy Suites Franchise Agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
[CI DT ES GU HFS OL PY QQ UP: Due thirty-six (36)
months from the Effective Date
Renovation Commencement Date: [
Renovation Work Completion Date: [
[SELECT FOR COO/RL:][All due dates in the PIP that are a specified number of months or days shall mean the number of months or days from the Effective Date.]
[SELECT FOR CV:][All due dates in the PIP that are a specified number of months or days shall mean the number of months or days from the Opening Date.]
Expiration Date: [SELECT:
New Construction – At midnight on the last day of the month [EY HAM HGI H2 HWS PO UAB RU: twenty-two (22) years from the [SELECT: Effective Date] [Opening Date] [CI, DT ES GU HFS OL PY QQ UP: twenty-three (23) years from the [SELECT: Effective Date] [Opening
Date]
Conversion – At midnight on the last day of the month SELECT: ten (10) to twenty (20) years from the Opening
Date
Change of Ownership – Remaining Term under the
existing franchise agreement
[IF COO: Obligations of Former Franchisee. You acknowledge and agree that you are directly responsible for, and will pay on demand, all fees and charges due and owing us and our Affiliates related to the former franchise agreement for the Hotel if any such fees and charges remain outstanding as of or accrue after the Effective Date of this Agreement.
This restriction does not apply to any hotel or motel that is currently open or under construction or has been approved for development or opening as a Restricted Brands hotel as of the Effective Date ("Existing Hotel").
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the 'Effective Date' is a critical reference point within the Franchise Agreement, marking the commencement of various obligations, restrictions, and timelines for both the franchisor and the franchisee. The Effective Date serves as the starting point for calculating deadlines related to renovations, the expiration of the franchise term, and other time-sensitive requirements outlined in the agreement.
Specifically, the Effective Date is used to determine when certain obligations begin, such as the commencement of renovations, which are due thirty-six months from the Effective Date. The expiration date of the franchise agreement is also calculated from the Effective Date, typically spanning twenty-two or twenty-three years for new construction. Moreover, in cases of a change of ownership, the Effective Date of the new franchise agreement dictates the termination date of the previous agreement, ensuring a seamless transition of responsibilities and rights.
Furthermore, the Effective Date plays a role in defining restrictions and obligations related to existing hotels and potential liabilities. For instance, restrictions on new hotels do not apply to existing hotels open or approved for development as of the Effective Date. Additionally, in the event of a transfer or amendment to the franchise agreement, the Effective Date determines when the original agreement is superseded, and the franchisee becomes responsible for any outstanding fees or charges accruing after that date. Therefore, prospective Embassy Suites franchisees should pay close attention to the Effective Date, as it triggers numerous essential terms and conditions within the Franchise Agreement.