What is the definition of a 'Permitted Transfer' in the context of an Embassy Suites By Hilton franchise agreement?

According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, a 'Permitted Transfer' is defined as any transfer by the franchisee or their equity owners that does not result in a change of control of the franchisee, the hotel, or the hotel site. This is further specified in Section 12.2 of the franchise agreement.

In practical terms, this means that a franchisee can transfer ownership or equity in the Embassy Suites By Hilton franchise as long as the original franchisee or controlling entity still maintains control over the operations, the physical hotel property, and the land on which it is located. This allows for some flexibility in ownership structure without requiring the franchisor's extensive approval process typically associated with a full change of ownership.

It is important for prospective Embassy Suites By Hilton franchisees to understand the specific conditions outlined in Section 12.2 of the franchise agreement to ensure any planned transfers qualify as 'Permitted Transfers.' Failure to comply with these conditions could result in the transfer being classified as a 'Change of Ownership Transfer,' which requires franchisor approval and may involve additional fees and requirements. Franchisees should carefully review this section and consult with legal counsel to ensure compliance.