What does 'Other Businesses' mean in the Embassy Suites By Hilton franchise agreement?
Embassy_Suites_By_Hilton 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 rights to, and will not make any claims or demands for, damages or other relief arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including, but not limited to, liability for claims for unfair competition, breach of contract, breach of any applicable implied covenant of good faith and fair dealing, or divided loyalty. "Other Businesses" means any business activity we or our affiliates engage in, other than the licensing of your Hotel.
Source: Item 12 — TERRITORY (FDD pages 67–70)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, "Other Businesses" refers to any business activity that Embassy Suites By Hilton or its affiliates engage in, aside from licensing the franchisee's hotel. This broad definition allows Embassy Suites By Hilton and its affiliates to participate in various ventures, whether related to lodging and hospitality or not, and whether under the Embassy Suites By Hilton brand, a competitive brand, or otherwise. This can occur at any time and in any location. Embassy Suites By Hilton and its affiliates have the right to engage in these "Other Businesses" even if they compete with the franchisee's hotel.
Embassy Suites By Hilton may also modify its System, use or license parts of it to others, utilize facilities and personnel associated with the System in these "Other Businesses", and use the Embassy Suites By Hilton brand and marks in these ventures. The franchisee acknowledges that they have no rights to claim damages or other relief related to these activities and that Embassy Suites By Hilton will not be liable for claims of unfair competition, breach of contract, or divided loyalty as a result of these activities.
For a prospective Embassy Suites By Hilton franchisee, this means that Embassy Suites By Hilton retains significant freedom to diversify its business activities without being restricted by the franchise agreement. This could lead to increased competition for the franchisee's hotel, either directly or indirectly, through these "Other Businesses". While the franchisee may have a Restricted Area Provision, this provision may not protect them from all competitive activities undertaken by Embassy Suites By Hilton or its affiliates through these "Other Businesses."