What is the definition of 'Assumption Agreement' in the context of the Embassy Suites By Hilton Franchise Agreement?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor confirms that Lender is not a Sanctioned Person, Franchisor will promptly prepare Franchisor's then-current form assumption agreement ("Assumption Agreement") to document the Assumption, and deliver the Assumption Agreement to Lender.
Lender must execute and return the Assumption Agreement to Franchisor within ten (10) business days after receipt from Franchisor.
Lender's failure to timely execute and deliver the Assumption Agreement may be deemed a default under the Franchise Agreement entitling Franchisor to terminate the Franchise Agreement.
Any renovation requirements imposed by Franchisor in connection with the Assumption will not exceed those which Franchisor could have imposed had Franchisee remained as the Franchisee under the Franchise Agreement.
In lieu of any transfer or application fee for the Assumption, Lender agrees to pay Franchisor a processing fee equal to the permitted transfer fee in the Franchise Agreement. If the Franchise Agreement does not reference a permitted transfer fee, then the processing fee will be Five Thousand Five Hundred Dollars ($5,500).
Source: Item 23 — RECEIPTS (FDD pages 97–304)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the 'Assumption Agreement' is a document used to formalize the assumption of the Franchise Agreement by a lender who acquires possession and/or ownership of the hotel due to an acquisition.
Following the lender's acquisition of the hotel, Embassy Suites By Hilton will request necessary information to ensure the lender is not a Sanctioned Person. If the lender meets this criteria, Embassy Suites By Hilton will then prepare their current form of the Assumption Agreement. The lender is then required to execute and return this agreement within ten business days of receiving it from Embassy Suites By Hilton.
Failure by the lender to execute and deliver the Assumption Agreement in a timely manner may be considered a default under the Franchise Agreement, potentially leading to termination of the agreement by Embassy Suites By Hilton. Any renovation requirements imposed by Embassy Suites By Hilton in connection with the Assumption will not exceed what could have been imposed had the original franchisee remained in place. In place of a transfer or application fee, the lender will pay Embassy Suites By Hilton a processing fee equal to the permitted transfer fee in the Franchise Agreement. If the Franchise Agreement does not reference a permitted transfer fee, then the processing fee will be Five Thousand Five Hundred Dollars ($5,500).