Under what circumstances can Embassy Suites require me to retain a Management Company?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ur reasonable business judgment, is inexperienced or unqualified in managerial skills or operating capacity or capability, or is unable to adhere fully to the obligations and requirements of the Franchise Agreement.
If you wish to manage your Hotel directly, you must have our prior written approval and successfully complete our training program, unless we waive this requirement. If we determine that you are not qualified to operate the Hotel, at any time, we may require you to retain a Management Company that is acceptable to us to manage the Hotel.
If you wish to hire or are required to hire a Management Company to manage your Hotel, you must obtain our prior written approval. Your Management Company must have the authority to perform all of your obligations under the Franchise Agreement, including all indemnity and insurance obligations. After we approve the Management Company, we can require the general manager and other personnel, such as the director of sales, to attend training programs that pertain to the operational functions of the Hotel related to those roles as are necessary to meet our Brand Standards. If your Management Company resigns or is terminated by you, or otherwise becomes unsuitable or unqualified to operate the Hotel as determined by us, in our sole judgment, you must retain a new Management Company that is acceptable to us within 90 days.
You are solely responsible for the management and operation of your Hotel at all times, regardless of whether you are an individual, corporation, limited liability company, partnership or other entity. Your engagement of a Management Company does not reduce your obligations under the Franchise Agreement. We may communicate directly with your managers and Management
Company, and we have the right to rely on their communications to us as being on made your behalf.
We will not require you or your Management Company to sign an agreement not to compete with us after the Franchise Agreement terminates or expires.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 74–75)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, franchisees must provide qualified and experienced management for their hotel, either themselves or through an approved third-party management company. If a franchisee wishes to manage the hotel directly, they need prior written approval from Embassy Suites and must successfully complete their training program, unless this requirement is waived.
However, Embassy Suites retains the right to mandate the retention of a management company. Specifically, if Embassy Suites determines, at any time, that the franchisee is not qualified to operate the hotel, they can require the franchisee to hire an Embassy Suites-approved management company. Furthermore, if the franchisee's management company resigns, is terminated, or is deemed unsuitable or unqualified by Embassy Suites, the franchisee must retain a new, acceptable management company within 90 days.
Additionally, Embassy Suites may disapprove a management company that is a 'Competitor,' defined as an entity that owns, licenses, or franchises a competing hotel brand. If a franchisee's management company becomes a Competitor, the franchisee has 90 days to find a qualified substitute approved by Embassy Suites. This ensures that the hotel is managed by an entity that is aligned with Embassy Suites's interests and brand standards.