Under what conditions can Embassy Suites reject a notice of loan transfer to a trustee?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Assignment.
This letter agreement may not be assigned by Lender without the written consent of Franchisor; provided, however, Franchisor's consent is not required for any assignment to:
(a) a direct or indirect subsidiary or affiliate of Lender in connection with an Acquisition.
(b) the trustee in a securitization if Lender (i) directly transfers the Loan to the trustee and (ii) gives notice to Franchisor within thirty (30) days of the transfer, identifying the new "Lender" and the new address for notice.
If Lender fully complies with the provisions of this Subparagraph, Franchisor will recognize the trustee as "Lender" under this letter agreement; but Franchisor may, in its discretion, reject any notice that is not sent by Lender or that is not sent in a timely manner in accordance with this Subparagraph.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, Embassy Suites may reject a notice of loan transfer to a trustee under specific circumstances. The franchisor's consent is generally not required for assignment to a trustee in a securitization if the lender directly transfers the loan to the trustee and provides notice to Embassy Suites within 30 days of the transfer. This notice must identify the new lender and provide the new address for notices.
However, Embassy Suites retains the discretion to reject the notice if it is not sent by the lender or if it is not sent in a timely manner, meaning it's sent outside the 30-day window. This provision ensures that Embassy Suites is kept informed of changes in the loan ownership and has the correct contact information for the new lender.
For a prospective Embassy Suites franchisee, this means that if their lender transfers the loan to a trustee, it is crucial that the lender adheres to the notification requirements. Failure to do so could result in Embassy Suites not recognizing the trustee as the new lender, potentially creating complications in future communications or dealings related to the franchise agreement. The franchisee should ensure their lender is aware of these requirements to avoid any issues.