What is the termination fee for Embassy Suites if the agreement is terminated during the second year?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ed Equipment as described in Section 1 above.
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- Refresh of Authorized Equipment. Under HSS's refreshment program, Customer will be responsible for and will pay for all fees and costs for the replacement or refreshment of the Authorized Equipment in HSS's sole discretion ("Refresh") on an approximate three (3) year cycle, starting approximately three (3) years after the initial shipment of such Authorized Equipment and for the provision of maintenance services by the Preferred Provider on such refreshed equipment. The terms and conditions of the Authorized Equipment maintenance services for such equipment (included in such initial Refresh and included in any additional Refresh or Refreshes of Customer's Authorized Equipment) will be the same a
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the termination fee depends on whether a Customer Refresh of Authorized Equipment has occurred. If the agreement is terminated during the second year following the Start Date, the termination fee is $2,600. However, if the termination occurs after a Customer Refresh of Authorized Equipment, the termination fee during the second year is $2,800.
This means that an Embassy Suites franchisee could face a higher termination fee if they have recently upgraded or refreshed their equipment. The "Start Date" is defined as the shipment date of the Network Authorized Equipment to the Customer's Hotel. The termination fee is designed to reimburse the Preferred Provider and/or HSS in part for unamortized or otherwise uncovered costs, including costs of Certified Third Party Software and costs incurred in the start up and provision of maintenance services.
Prospective franchisees should carefully consider the timing of any planned equipment refreshes in relation to the term of their agreement. Terminating the agreement after a refresh could significantly increase the termination fee. It is important to clarify with Embassy Suites what constitutes a "Customer Refresh of Authorized Equipment" and how the termination fee is calculated in specific scenarios to avoid unexpected costs.