Under what circumstances is an individual or entity NOT considered a 'Competitor' of Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Competitor" means any individual or entity that, at any time during the Term, whether directly or through an Affiliate, owns in whole or in part, or is the licensor or franchisor of a Competing Brand, irrespective of the number of hotels owned, licensed or franchised under such Competing Brand name. A Competitor does not include an individual or entity that: (i) is a franchisee of a Competing Brand; (ii) manages a Competing Brand hotel, so long as the individual or entity is not the exclusive manager of the Competing Brand; or (iii) owns a minority interest in a Competing Brand, so long as neither that individual or entity nor any of its Affiliates is an officer, director, or employee of the Competing Brand, provides services (including as a consultant) to the Competing Brand, or exercises, or has the right to exercise, Control over the business decisions of the Competing Brand.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the term 'Competitor' has a specific meaning with certain exceptions. Generally, a 'Competitor' is any individual or entity that owns, licenses, or franchises a competing hotel brand, regardless of the number of hotels involved. However, the definition excludes certain relationships with competing brands.
Specifically, an individual or entity is not considered a 'Competitor' of Embassy Suites if they are merely a franchisee of a Competing Brand. Similarly, managing a Competing Brand hotel does not automatically classify someone as a 'Competitor', provided they are not the exclusive manager. Furthermore, owning a minority interest in a Competing Brand does not make an individual or entity a 'Competitor' as long as they, nor their Affiliates, are an officer, director, or employee of the Competing Brand, do not provide services (including consulting), and do not exercise control over the Competing Brand's business decisions.
For a prospective Embassy Suites franchisee, this definition is important because the franchise agreement restricts franchisees from becoming a 'Competitor'. Understanding these exceptions allows franchisees to engage in certain activities related to other hotel brands without violating the agreement. However, it is crucial to avoid any role that involves control or significant influence over a competing brand, as this would likely be considered a conflict of interest and a breach of the franchise agreement.