Under what conditions related to shared facilities at an Embassy Suites hotel would the agreement be impacted?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- b) any of the Shared Facilities fail to meet System Standards as set forth under the Agreement and/or the [Hotel #2] Agreement;
- c) either the Agreement or the [Hotel #2] Agreement is terminated for any reason;
- d) You Transfer a controlling Equity Interest in you, the Hotel Site, or the Agreement, without simultaneously selling, leasing, assigning, or Transferring a controlling Equity Interest in you (or your Affiliate controlling [Hotel #2] Hotel), the [Hotel #2] Hotel Site, or the [Hotel #2] Agreement, to the same transferee or a transferee under common control with such transferee. Any Transfers are subject to the Transfer provisions of the Agreement. Failure to comply with the Transfer provisions is a material breach of the Agreement.
If we withdraw our consent pursuant to this paragraph, to the extent that the Shared Facilities are part of Standards, you shall immediately make arrangements to either procure the Shared Facilities, or to construct comparable facilities and amenities, for the exclusive use of the Hotel. Your failure to procure the Shared Facilities or construct comparable facilities and amenities to meet Standards is deemed to be a default that may result in the termination of the Agreement. If the Shared Facilities are no longer a part of the Hotel, you are responsible for immediately removing any Marks or distinctive System features associated with the Brand from any of the Shared Facilities that are accessible to or visible by Hotel guests, and removing all other indicia that the Hotel had joint possession or use of the Shared Facilities with the [Hotel #2] Hotel.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the franchise agreement can be affected under certain conditions related to shared facilities. Specifically, if any of the shared facilities fail to meet the System Standards outlined in the franchise agreement or a separate agreement for Hotel #2, this can impact the agreement. Additionally, the agreement is affected if either the Embassy Suites agreement or the Hotel #2 agreement is terminated for any reason.
Furthermore, if a franchisee transfers a controlling equity interest in their business, the hotel site, or the agreement without simultaneously transferring a controlling equity interest in Hotel #2 to the same transferee (or an affiliate under common control), it constitutes a breach of the agreement. In such cases, Embassy Suites may withdraw consent, and the franchisee must then arrange to either procure the shared facilities or construct comparable facilities exclusively for the Embassy Suites hotel.
Failure to meet these requirements can lead to a default and potential termination of the agreement. If the shared facilities are no longer part of the hotel, the franchisee is responsible for immediately removing any Embassy Suites branding or system features from the shared facilities that are accessible or visible to hotel guests. This ensures that there is no confusion about the hotel's affiliation and maintains the integrity of the Embassy Suites brand.