What is a 'Waiver Notice' in the context of an Embassy Suites franchise agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Lender may give written notice (a "Waiver Notice") to Franchisor of Lender's election to waive Lender's right to assume the Franchise Agreement at any time (i) during Lender's Cure Period, or the Additional Period, as the Additional Period may be extended in accordance with Subparagraph 1(b) of this letter agreement, or (ii) within twenty (20) calendar days after the completion of the Acquisition.
If given, the Waiver Notice will be effective twenty (20) calendar days after Franchisor's receipt of the Waiver Notice, and Franchisor may rely on the Waiver Notice to exercise its remedies against Franchisee under the Franchise Agreement, including termination of the Franchise Agreement.
Lender shall not be liable for any termination fees or liquidated damages arising from the early termination of the Franchise Agreement; provided, however, if Lender or its designee is or comes into possession of the Hotel before the Waiver Notice is effective, then Lender shall be responsible for posttermination de-identification obligations at the Hotel, and for payment of any fees owed to Franchisor pursuant to the Franchise Agreement that accrued while Lender was in possession of the Hotel before the Waiver Notice is effective, but excluding termination fees or liquidated damages.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, a 'Waiver Notice' is a written notification from the lender to Embassy Suites, indicating the lender's decision to waive their right to assume the franchise agreement. This notice can be given during the lender's cure period or an additional period, or within 20 calendar days after the completion of the acquisition.
The 'Waiver Notice' becomes effective 20 calendar days after Embassy Suites receives it. Upon effectiveness, Embassy Suites can then exercise its rights against the franchisee, which may include terminating the franchise agreement. This waiver protects the lender from being forced to take on the obligations of the franchise agreement if they acquire the hotel through foreclosure or similar means.
However, if the lender takes possession of the hotel before the 'Waiver Notice' becomes effective, they are responsible for the costs of de-identifying the hotel as an Embassy Suites and for any fees owed to Embassy Suites that accrued during their possession, excluding termination fees or liquidated damages. This provision ensures that Embassy Suites is not financially harmed by a lender's temporary control of a non-compliant or underperforming hotel.