Under the Embassy Suites software license agreement, is the license granted to the customer exclusive?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.1.2 The Proprietary Software and Certified Third Party Software for which there is no separate license agreement are licensed or sublicensed to Customer under this Agreement on the following terms and conditions:
- a) The license is personal, non-exclusive and non-transferable.
- b) The Software may be used by Customer solely on the Authorized Equipment and solely for the operation of the Hotel.
- c) Except for a single copy of Certified Third Party Software which may be maintained by Customer for archival back-up purposes, Customer will not reproduce or reuse, in whole or in part, any Software, documentation or materials comprising any portion of the Information System in any manner (whether directly or in creating a new use or otherwise) without the prior written consent of HSS. Customer will not cause or permit any reverse engineering, disassembly or de-compilation of any of the Software or any review of Software data structures.
- d) Customer will accept all patches, bug fixes, updates, version upgrades, maintenance and service packs (collectively, "Patches") from HSS or the relevant Preferred Provider that are deemed necessary by HSS for the proper function and security of the Software. HSS is not responsible for performance or security issues that result from Customer's failure to accept the application of Patches.
- e) Customer recognizes the confidential and proprietary nature of the Software and agrees to maintain the Software in confidence in accordance with Article 6 (Confidentiality). Customer will not permit the Software and related documentation to be used or accessed by anyone other than Customer's employees or contractors pursuant to Section 2.1.2 (b) who are bound by obligations of confidentiality no less stringent than those set forth herein.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the software license granted to the customer is not exclusive. Specifically, the license for the Proprietary Software and Certified Third Party Software is personal, non-exclusive, and non-transferable. This means that Embassy Suites can license the same software to other franchisees or entities.
This non-exclusive arrangement has important implications for a prospective Embassy Suites franchisee. It confirms that the franchisee does not have any unique rights to the software and must operate it according to the terms defined by Embassy Suites. The franchisee cannot transfer the license to another party. The franchisee's use of the software is restricted to the operation of the hotel and on authorized equipment only.
Furthermore, the franchisee is obligated to accept all patches, bug fixes, updates, version upgrades, maintenance, and service packs deemed necessary by HSS (Hilton Systems Solutions, LLC) for the software's proper function and security. Failure to accept these updates could result in performance or security issues, for which HSS is not responsible. The franchisee also acknowledges the confidential and proprietary nature of the software and must maintain it in confidence, ensuring that only employees or contractors bound by similar confidentiality obligations have access.
In summary, the non-exclusive nature of the software license is a standard practice in franchising, allowing the franchisor to maintain control over its proprietary systems and ensure consistent standards across all franchised locations. Prospective franchisees should be aware of these conditions and their responsibilities regarding software usage and maintenance.