Can Embassy Suites use the System in Other Businesses?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The standard Franchise Agreement permits us to own, operate, manage, franchise, license, lease, or affiliate or associate with any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a competitive brand, or otherwise, at any time and in any location. We and our affiliates have the right to engage in any Other Businesses, even if they compete with your Hotel, the Brand, System Hotels, or Network Hotels, and whether we or our affiliates start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, affiliate or associate with, such Other Businesses.
We may also: (a) modify the System by adding, altering, or deleting elements of the System; (b) use or license to others all or part of the System; (c) use the facilities, programs, services and/or personnel used in connection with the System in Other Businesses; and (d) use the System, the Brand, and the Marks in the Other Businesses. You acknowledge and agree that you have no
Source: Item 12 — TERRITORY (FDD pages 67–70)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, Embassy Suites retains broad rights to utilize the System in other business ventures. The standard Franchise Agreement explicitly permits Embassy Suites to engage in various activities, including owning, operating, managing, franchising, licensing, leasing, or affiliating with any other business, regardless of its nature or industry, and irrespective of whether it competes with the franchisee's hotel. This extends to businesses operating under the Embassy Suites brand, competitive brands, or otherwise, at any location and at any time.
Embassy Suites and its affiliates possess the right to engage in other business activities, even if they directly compete with a franchisee's Embassy Suites hotel, other System hotels, or Network hotels. This includes the ability to start new businesses, as well as purchase, merge with, acquire, or affiliate with existing businesses. Furthermore, Embassy Suites may modify the System, license it to others, and utilize its resources, programs, services, and personnel in these other business ventures.
For a prospective franchisee, this means that Embassy Suites has significant latitude to operate or partner with businesses that could potentially draw customers away from their franchised location. While a franchisee may be granted a Restricted Area, this provision may not provide complete protection, as it may exclude other Hilton brands or existing hotels. The FDD makes it clear that franchisees have no recourse for damages or other relief arising from these activities, and that Embassy Suites will not be liable for claims of unfair competition or breach of contract due to these activities. This highlights the importance of carefully evaluating the competitive landscape and potential for encroachment before investing in an Embassy Suites franchise.