What is the definition of 'Change of Ownership' in the context of the Embassy Suites By Hilton franchise application?

Based on the 2025 Franchise Disclosure Document, a 'Change of Ownership' for an Embassy Suites By Hilton franchise occurs when the transfer provisions of the Franchise Agreement apply to a sale, assignment, or transfer by a lender after an assumption. This typically happens when a lender sells the hotel to a third party who wishes to continue operating it as an Embassy Suites By Hilton. In such cases, the third party must apply for a change of ownership, be approved by Embassy Suites By Hilton, and pay the applicable application fee.

This process is triggered when a lender, who has assumed control of the hotel property, decides to sell it to another party. The new party, if intending to continue operating the hotel under the Embassy Suites By Hilton brand, must go through the formal change of ownership application process. This ensures that the new owner meets the brand's standards and is approved by the franchisor.

Prospective franchisees should be aware that any transfer of ownership necessitates a formal application, approval, and associated fees. This requirement ensures brand consistency and quality control, as Embassy Suites By Hilton retains the right to vet and approve any new ownership to maintain its standards. The FDD does not specify the exact criteria for approval, so it would be prudent for potential franchisees to discuss these requirements with the franchisor to understand the full scope of obligations during a change of ownership scenario.