Under what circumstances can the confidentiality provisions of the letter agreement related to the Embassy Suites franchise be disclosed to a third party?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The provisions of this letter agreement shall not be disclosed by Lender or Franchisee to any third party, excepting (a) the respective employees, directors, officers, agents, regulators or legal and financial representatives of each of Franchisee, Lender and Lender's servicers, trustees and certificate holders, on a need-to-know basis; (b) as required by law; (c) as mutually agreed to by the parties; (d) as part of any due diligence performed as a part of a sale, assignment, participation or securitization of the Loan by Lender, or a sale of the Hotel after an Acquisition; (e) any investor or potential investor in, or underwriter of, the Loan; and/or (f) any rating agency that rates securities backed by the Loan. Except as provided above, Franchisee and Lender agree not to copy, reproduce or otherwise make available in any form whatsoever to any other person, firm, corporation, or business the provisions of this letter agreement.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the confidentiality provisions within the letter agreement between the lender and franchisee are subject to certain exceptions that allow disclosure to third parties. These exceptions outline specific situations where the confidentiality of the agreement can be waived.
The confidentiality provisions can be disclosed to the respective employees, directors, officers, agents, regulators, or legal and financial representatives of the franchisee, lender, and lender's servicers, trustees, and certificate holders, provided it is on a need-to-know basis. Disclosure is also permitted if required by law or if all parties mutually agree to it. Additionally, the provisions can be shared as part of due diligence during a sale, assignment, participation, or securitization of the loan by the lender, or a sale of the hotel after an acquisition.
Furthermore, the letter agreement's provisions can be disclosed to any investor, potential investor, or underwriter of the loan, as well as any rating agency that rates securities backed by the loan. However, outside of these explicitly stated exceptions, both the franchisee and the lender are bound by the agreement not to copy, reproduce, or make available the provisions of the letter agreement to any other person, firm, corporation, or business.