What is the definition of a 'Sanctioned Person' in the context of transfers for Embassy Suites By Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
16.13 Sanctioned Persons and Anti-bribery Representations and Warranties.
16.13.1 You represent, warrant and covenant to us and our Affiliates, on a continuing basis, that:
16.13.1.1 neither you, nor any Person having Control over you or the Hotel, is a Sanctioned Person;
16.13.1.2 you have not and will not obtain, receive, transfer or provide any funds, property, debt, equity, or other financing related to this Agreement and the Hotel or Hotel Site to/from a Sanctioned Person;
16.13.1.3 neither you, nor any Person having Control over you or the Hotel, has been convicted of, pleaded guilty to, or otherwise been adjudged liable for any violation of laws, ordinances, rules or regulations that pertain to bribery or corruption, money laundering, competition, securities or financial fraud, trade sanctions or export controls, human trafficking, sex trade, or forced labor;
16.13.1.4 any funds received or paid in connection with entry into or performance of this Agreement have not been and will not be derived from illegal sources or activities, or commingled with illegal funds, and that you are not engaging in this transaction in furtherance of a criminal act;
16.13.1.5 in preparation for and in entering into this Agreement, neither you, nor any Person having Control over you or the Hotel, has made any Improper Payment or engaged in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws, and, in connection with this Agreement or the performance of your obligations under this Agreement, neither you nor any Person having Control over you or the Hotel will directly or indirectly make, offer to make, or authorize any Improper Payment or engage in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws;
16.13.1.6 neither you, nor any Person having Control over you or the Hotel who may be considered a Government Entity or Government Official, improperly uses their status or position to influence official actions or decisions or to secure any improper advantages to or for the benefit of the Hotel or us; and
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Embassy Suites By Hilton franchise agreement includes clauses related to 'Sanctioned Persons' to ensure compliance with various laws and regulations. While the FDD mentions the term 'Sanctioned Person' in several contexts, it does not explicitly define the term itself. However, the document places certain obligations and restrictions on franchisees and guarantors regarding interactions with Sanctioned Persons.
The franchise agreement stipulates that neither the franchisee, any person having control over the franchisee or the hotel, nor the guarantor should be a Sanctioned Person. Furthermore, franchisees and guarantors must not obtain, receive, transfer, or provide any funds, property, or financing related to the franchise agreement or the hotel to or from a Sanctioned Person. These stipulations are part of broader representations, warranties, and covenants related to anti-bribery and compliance with applicable laws.
Given the absence of a clear definition within the provided FDD excerpts, prospective Embassy Suites By Hilton franchisees should seek clarification from the franchisor regarding the precise definition of 'Sanctioned Person.' Understanding this term is crucial, as non-compliance could lead to serious repercussions, including default of the franchise agreement. Franchisees should also inquire about the specific regulations and lists that Embassy Suites By Hilton uses to identify Sanctioned Persons to ensure ongoing compliance.