For an Embassy Suites By Hilton franchise, what is the purpose of the 'Change of Ownership Application'?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
"Change of Ownership Application" means the application that is submitted to us by you or the Transferee for a new franchise agreement in connection with a Change of Ownership Transfer.
"Change of Ownership Transfer" means any proposed Transfer that results in a change of Control of Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by this Agreement, all as set out in Subsection 12.2.2.
12.2.2 Change of Ownership Transfer. A Change of Ownership Transfer is any Transfer that will result in a change of Control of you, the Hotel or the Hotel Site, or is not otherwise described in Subsection 12.2.1. We will have sixty (60) days from our receipt of the completed and signed franchise application to consent or withhold our consent to any proposed Change of Ownership Transfer. Our consent will not be unreasonably withheld. You consent to our communication with any third party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer. Our consent to the Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date of closing the Change of Ownership Transfer ("Closing"):
12.2.2.1 Transferee submits a completed and signed Change of Ownership Application, pays our then-current franchise application fee, executes our then-current form of franchise agreement, and all required ancillary documents. If all conditions to our consent are fulfilled, the date of Closing will be the termination date of this Agreement, and the effective date of Transferee's franchise agreement;
12.2.2.2 you are not in default of this Agreement or any other agreements with
us or our Affiliates;
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the Change of Ownership Application is submitted to Hilton Franchise Holding LLC by either the current franchisee or the prospective new franchisee (Transferee) when there is a proposed transfer that would result in a change of control of the franchise, the hotel, or the hotel site. This application is for obtaining a new franchise agreement in connection with this transfer of ownership.
Embassy Suites By Hilton requires this application to ensure that the new owner meets their standards and is suitable to operate the franchise. As part of the application process, the Transferee must also pay the then-current franchise application fee and execute the then-current form of the franchise agreement, along with all other required documents. Hilton Franchise Holding LLC has 60 days from the receipt of the completed application to either approve or deny the proposed transfer; their consent will not be unreasonably withheld.
The approval of the Change of Ownership Transfer is conditional. The current franchisee must not be in default of the existing agreement or any other agreements with Hilton Franchise Holding LLC or its affiliates. If all conditions are met, the closing date of the transfer will also serve as the termination date of the existing franchise agreement, and the new franchise agreement with the Transferee will become effective on that same date.