Under the Embassy Suites agreement, does the customer receive legal or equitable title to the software?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1.4 No legal or equitable title to or ownership of any of the Software or any proprietary rights therein are transferred to Customer under this Agreement other than the limited software license specified herein.
2.1.5 Customer acknowledges and agrees that the Software is owned by HSS, HSS' Affiliates and/or their respective licensors and that everything in the Software, including all intellectual property, is proprietary to HSS, HSS's Affiliates and/or their licensors, respectively.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, franchisees do not receive legal or equitable title to the software they license. The agreement specifies that the franchisee is granted a limited software license, but ownership of the software and all proprietary rights remain with HSS, its affiliates, and/or their licensors.
This means that while franchisees have the right to use the software for operating their Embassy Suites hotel, they do not own the software itself. They cannot sell, transfer, or otherwise dispose of the software. This is a common arrangement in franchising, where the franchisor retains control over the intellectual property and software used within the franchise system to ensure consistency and quality across all locations.
The franchisee's rights are limited to the terms of the software license, which include using the software on authorized equipment solely for the operation of the hotel. The franchisee must also accept all patches, bug fixes, updates, and version upgrades deemed necessary by HSS for the software's proper function and security. Failure to accept these updates can result in performance or security issues for which HSS is not responsible.
Embassy Suites franchisees must recognize the confidential and proprietary nature of the software and maintain it in confidence. They are responsible for ensuring that only their employees or contractors who are bound by confidentiality obligations have access to the software and related documentation. This helps protect HSS's intellectual property and maintain the integrity of the Embassy Suites system.