Does Embassy Suites By Hilton allow equity interest to be held as bearer shares?

According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, Embassy Suites By Hilton does not allow equity interest to be held as bearer shares. As part of the franchise agreement, the franchisee represents and warrants that no equity interest has been issued, converted to, or is held as bearer shares or any other form of ownership for which there is no traceable record of the identity of the legal and beneficial owner of such equity interest.

This requirement ensures transparency in ownership and control of the franchise. Bearer shares, which do not have a registered owner, can be used to conceal ownership, which may pose risks related to regulatory compliance and financial accountability. By prohibiting bearer shares, Embassy Suites By Hilton aims to maintain a clear understanding of who owns and controls its franchises.

For a prospective Embassy Suites By Hilton franchisee, this means that all equity interests in the franchise entity must be traceable, with a clear record of the legal and beneficial owners. This requirement is a standard practice in franchising to ensure accountability and prevent potential legal or financial issues related to hidden ownership. Failing to comply with this provision would be a breach of the franchise agreement.