Under the HITS Agreement, what obligations must an Embassy Suites franchisee fulfill, including the maintenance of Network Authorized Equipment?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Customer will:
- (a) Perform all of its obligations under the HITS Agreement, including, but not limited to, the maintenance of the Network Authorized Equipment using the designated Preferred Provider for HSS's TSP.
- (b) Obtain and keep current insurance on the Network Authorized Equipment against all risks for the approximate value of the Network Authorized Equipment.
- (c) Pay any and all federal, state and local sales, use, gross receipts, excise or similar taxes incident to the payments under this TSP Agreement. Customer agrees to pay all personal property taxes associated with software licensed and equipment provided under the TSP Agreement.
- (d) Prevent any liens from attaching to the Network Authorized Equipment.
- (f) Preserve and protect the Network Authorized Equipment from loss, damage or theft.
- (g) Not use any unauthorized backup in connection with the Information System.
- (h) Make no unapproved repairs nor perform any unauthorized service to the Network Authorized Equipment.
- (i) Not allow any other equipment or software to be added to the Information System without prior specific written permission of HSS.
- (j) Allow the removal and future refreshment of Network Authorized Equipment at such time and in such manner as may be determined by HSS in its sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, franchisees have several obligations under the HITS (presumably Hilton Information Technology Standards) Agreement, particularly concerning Network Authorized Equipment. These obligations are detailed within the context of the TSP (Total Solution Program) Agreement, which is closely tied to the HITS Agreement. A key requirement is that franchisees must perform all obligations under the HITS Agreement, including maintaining the Network Authorized Equipment through a designated Preferred Provider for HSS's TSP. This means Embassy Suites franchisees cannot choose their own maintenance provider but must use the one specified by HSS.
In addition to maintenance, franchisees must obtain and maintain insurance on the Network Authorized Equipment, covering all risks for its approximate value. They are also responsible for paying all applicable federal, state, and local taxes related to payments under the TSP Agreement, including personal property taxes associated with the software and equipment. Furthermore, franchisees must prevent any liens from being attached to the Network Authorized Equipment and preserve and protect the equipment from loss, damage, or theft. Unauthorized backups or unapproved repairs to the information system are prohibited, and franchisees cannot add any other equipment or software to the system without prior written permission from HSS.
The agreement also stipulates that Embassy Suites franchisees must allow the removal and future refreshment of Network Authorized Equipment as determined by HSS. Defaulting on any agreement with HDOC, HSS, their affiliates, subsidiaries, or any Brand division, including the TSP Agreement, HITS Agreement, and the License Agreement, can impact the franchisee's benefits and HSS's obligations. Continued cooperation with HSS in the Total Solution Program, including the refreshment of Network Authorized Equipment, is also a condition. These obligations ensure that the technology infrastructure at each Embassy Suites location meets Hilton's standards and is consistently updated and maintained.