What are the consequences if an Embassy Suites By Hilton franchisee becomes a Sanctioned Person?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
13.2.11 you, your Affiliate or any Guarantor become a Sanctioned Person or are owned or controlled by a Sanctioned Person or fail to comply with the provisions of Subsection 16.13;
13.3 Interim Remedies. If we send you a written notice that you are in default of this Agreement, we may elect to impose an Interim Remedy, including the suspension of our obligations under this Agreement and/or our or our Affiliates' obligations under Your Hotel Agreements.
Damages Upon Termination By Us. If we terminate the Agreement under Subsection 13.1 or 13.2 above, you acknowledge your default will cause substantial damage to us. You therefore agree that if we terminate this Agreement, the termination will not be our sole remedy, and you will also be liable to us for all damages and losses we have suffered arising from the early termination of this Agreement to the same extent as if you had improperly terminated the Agreement. You also agree that you will remain liable for all other obligations and claims under this Agreement, including obligations following termination under Subsections 9.6, 10.3, 13.6, and Section 14 and other damages suffered by us arising out of your breach or default.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, if a franchisee, their affiliate, or any guarantor becomes a Sanctioned Person, or is owned or controlled by one, or fails to comply with the provisions of Subsection 16.13, it constitutes an event of default under the franchise agreement.
This default allows Embassy Suites By Hilton to send a written notice of default and elect to impose an Interim Remedy. This includes suspending their obligations under the agreement and/or their affiliates' obligations under the Hotel Agreements.
Furthermore, if Embassy Suites By Hilton terminates the agreement due to this default, the franchisee acknowledges that this will cause substantial damage to Embassy Suites By Hilton. The franchisee will be liable for all damages and losses suffered due to the early termination, as if the franchisee had improperly terminated the agreement themselves. The franchisee remains liable for all other obligations and claims under the agreement, including obligations following termination under Subsections 9.6, 10.3, 13.6, and Section 14, and other damages resulting from the breach or default.