When must the Termination Fee be paid to Embassy Suites after the termination of the Franchise Agreement?

According to Embassy Suites's 2025 Franchise Disclosure Document, the Termination Fee must be paid within thirty (30) days after the termination of the Franchise Agreement or on demand. This means that upon termination of the agreement, Embassy Suites has the right to demand immediate payment of the termination fee, or they may allow up to 30 days for the franchisee to remit payment.

This is a critical point for prospective franchisees to understand, as the termination fee can be a substantial amount. The FDD states that the termination fee is calculated based on various factors, including the number of guest rooms and the hotel's average monthly royalty fees. Therefore, franchisees need to be prepared to potentially pay this significant fee relatively quickly upon termination.

It is important to note that the FDD also states that Embassy Suites may elect to seek actual damages in lieu of the Termination Fee under certain circumstances, at their sole discretion. This implies that in some cases, the franchisee could be liable for an even greater amount than the Termination Fee if Embassy Suites believes their actual damages exceed the calculated fee. Franchisees should carefully review the conditions under which Embassy Suites might pursue actual damages to fully understand their potential financial exposure upon termination.