What does 'Trade Restrictions' mean in the context of the Embassy Suites lender estoppel and release agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- Lender Estoppel and Release.
As consideration for this letter agreement relating to the Loan:
- (a) Lender hereby certifies to Franchisor that Lender is not a Sanctioned Person. "Sanctioned Person" means any person, entity, or Government, including those with Control over such persons or entities, or acting on behalf of such persons or entity, who is subject to Trade Restrictions that prohibit or restrict the Parties' performance of the Parties' obligations under this Agreement. "Trade Restrictions" means trade, economic or investment sanctions, export controls, anti-terrorism, nonproliferation, anti-money laundering and similar restrictions in force pursuant to laws, rules and regulations imposed under Laws to which the Parties are subject.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, "Trade Restrictions" are defined within the context of the lender estoppel and release agreement. Specifically, the term refers to trade, economic, or investment sanctions, export controls, anti-terrorism measures, nonproliferation efforts, anti-money laundering regulations, and similar restrictions. These restrictions are enforced through laws, rules, and regulations imposed under the laws to which the involved parties are subject.
This definition is important because the lender in the agreement must certify that they are not a "Sanctioned Person." A "Sanctioned Person" is any individual, entity, or government that is subject to these Trade Restrictions, which could prohibit or restrict the parties' ability to fulfill their obligations under the agreement. This ensures that Embassy Suites is not engaging with any entity that could expose them to legal or financial risks due to violations of trade and economic laws.
For a prospective Embassy Suites franchisee, this clause highlights the importance of ensuring that any lenders they work with are in compliance with all applicable trade laws and regulations. Failure to do so could potentially jeopardize the franchise agreement if the lender is found to be a Sanctioned Person, leading to complications in financing and operations. This requirement is a protective measure for Embassy Suites, ensuring compliance and minimizing risks associated with international trade and financial regulations.