What constitutes a 'Lender's Cure Period' for an Embassy Suites By Hilton franchise?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
Lender shall have the right, but not the obligation, to cure the default within fifteen (15) calendar days beyond the expiration of any cure period given to Franchisee ("Lender's Cure Period").
If the default is for failure to comply with physical standards or other non-monetary default which could only be cured by Lender acquiring possession and/or ownership of the Hotel (each, an "Acquisition"), Lender may have an additional period of one hundred eighty (180) calendar days, commencing at the expiration of Lender's Cure Period, for Lender to complete its Acquisition, through foreclosure or other appropriate proceedings ("Additional Period"); provided that Lender must: (i) notify Franchisor no later than the date it commences proceedings (or promptly after action is stayed or enjoined) that Lender wants the Additional Period; (ii) commence proceedings and diligently prosecute such proceedings to completion; and (iii) comply with the obligations of Franchisee under the Franchise Agreement not being performed by Franchisee during the Additional Period including payment of all monetary obligations but excluding those obligations which can only be performed by Franchisee or which Lender cannot perform without possession and/or ownership of the Hotel.
On request by Lender, the Additional Period may be further extended by Franchisor in its determination, which determination shall take into consideration the period of time required to complete an Acquisition in the applicable jurisdiction, and any period of time in which Lender's action has been stayed or enjoined.
If Franchisor has not issued a default notice to Franchisee or Lender has cured Franchisee's default during Lender's Cure Period and Lender commences a foreclosure or other proceeding intended to result in an Acquisition, Lender may exercise the rights under this letter agreement under the terms and timelines outlined in this Subparagraph.
If Franchisor has not issued a default notice, Lender's notice to Franchisor of Franchisee's default under the Loan will be deemed to initiate the timeline outlined under the Lender's Cure Period and Additional Period.
Source: Item 23 — RECEIPTS (FDD pages 97–304)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, a 'Lender's Cure Period' refers to the period in which a lender has the right, but not the obligation, to correct a default on the franchise agreement. The standard Lender's Cure Period is fifteen calendar days beyond the expiration of any cure period given to the franchisee.
If the default involves failure to comply with physical standards or other non-monetary issues that can only be resolved by the lender taking possession and/or ownership of the hotel (referred to as an "Acquisition"), the lender may have an additional period of one hundred eighty calendar days, starting from the expiration of the Lender's Cure Period, to complete the Acquisition through foreclosure or other appropriate proceedings.
To qualify for this extended period, the lender must notify Embassy Suites By Hilton no later than the date proceedings commence, diligently pursue the proceedings to completion, and comply with the franchisee's obligations under the Franchise Agreement that the franchisee is not fulfilling. This includes payment of monetary obligations, excluding those that only the franchisee can perform or that the lender cannot perform without possession and/or ownership of the hotel. The franchisor may extend the Additional Period, considering the time needed for Acquisition in the relevant jurisdiction and any periods where the lender's action has been stayed or enjoined. If Embassy Suites By Hilton has not issued a default notice, the lender's notice to Embassy Suites By Hilton of the franchisee's default under the loan initiates the timeline for both the Lender's Cure Period and the Additional Period.