What constitutes an 'Affiliate' in relation to an Embassy Suites By Hilton franchise agreement?

According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, an 'Affiliate' is defined within the context of the franchise agreement. Specifically, it refers to any individual, firm, corporation, partnership, limited liability company, association, trust, or other entity that directly or indirectly controls, is controlled by, or is under common control with the entity in question.

For a prospective Embassy Suites By Hilton franchisee, this definition is important because it clarifies the scope of relationships that could have implications under the franchise agreement. For example, transactions or agreements between the franchisee and an affiliate could be subject to scrutiny or require disclosure to Hilton Franchise Holding LLC. Understanding this definition helps franchisees recognize potential conflicts of interest or areas where their business dealings might be affected by the franchise agreement.

The concept of 'control' is central to this definition, although the FDD excerpt does not define 'control'. Generally, 'control' in a business context refers to the power to direct the management and policies of an entity. This could be through ownership of voting shares, contractual agreements, or other means. Franchisees should be aware of any entities that might exert control over their operations or that they might control, as these relationships could fall under the 'Affiliate' definition.

Given the broad nature of the definition, it is advisable for prospective Embassy Suites By Hilton franchisees to seek legal counsel to fully understand the implications of the 'Affiliate' clause and how it might apply to their specific circumstances and business structure. This will ensure compliance with the franchise agreement and avoid potential disputes with the franchisor.