Under what conditions related to equipment similarity and agreement terms will Embassy Suites not charge Maintenance Fees greater than those charged to other customers?

According to Embassy Suites's 2025 Franchise Disclosure Document, the Maintenance Fees charged to a franchisee will not be greater than those charged to similarly situated customers under specific conditions. Embassy Suites will not charge a franchisee Maintenance Fees that are higher than those charged to other franchisees if the other franchisees: utilize equipment substantially similar to the Authorized Equipment and operate under an agreement with terms and conditions substantially similar to the franchisee's agreement. The determination of what constitutes a 'similarly situated Customer' is based on factors determined solely by HSS.

This clause protects franchisees from being overcharged for Maintenance Fees compared to their peers. However, Embassy Suites retains discretion in determining what constitutes 'similarly situated,' which introduces some ambiguity. A prospective franchisee should seek clarification from Embassy Suites regarding the specific factors used to determine similarity and how these factors might impact their Maintenance Fees.

It is important to note that the Maintenance Fees are subject to change annually on January 1 at Embassy Suites's discretion. This means that while the initial fees may be competitive, they could increase over time. Franchisees should factor in potential fee increases when projecting their operating costs and profitability. Understanding the criteria for fee adjustments and the historical trends in Maintenance Fee changes can help franchisees better anticipate future expenses.