For an Embassy Suites By Hilton franchise, what is the relationship between the 'Affiliate' and the subject entity?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
cation described in the Addendum.
NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each Party to the other Party in this Agreement, the Parties agree as follows:
1.0 DEFINITIONS
The following capitalized terms will have the meanings set forth after each term:
- "Affiliate" means any natural person or firm, corporation, partnership, limited liability company, association, trust or other entity which, directly or indirectly, Controls, is Controlled by, or is under common Control with, the subject entity.
- "Agreement" means this Franchise Agreement, including any exhibits, attachments and addenda.
- "Anti-Corruption Laws" means all applicable anti-corruption, anti-bribery, anti-money laundering, books and records, and internal controls laws.
- "Brand" means the brand name set forth in the Addendum.
- "Chain Code" means the code that we use to identify the Brand within our Reservation Service. We may modify, remove, or replace the Chain Code for the Brand at any time in our discretion.
- "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.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, for an Embassy Suites By Hilton franchise, an 'Affiliate' is defined as any entity that directly or indirectly controls, is controlled by, or is under common control with the subject entity. This broad definition encompasses various forms of relationships, including those with natural persons, firms, corporations, partnerships, limited liability companies, associations, trusts, or other entities. The concept of 'Control' is central to determining affiliate status, indicating a power to direct or influence the management and policies of the entity.
This definition is important for prospective Embassy Suites By Hilton franchisees because it clarifies the scope of related parties that may have an impact on the franchise agreement. Understanding the relationships between the franchisor, its affiliates, and the franchisee is crucial for assessing potential conflicts of interest, financial stability, and the overall support system available to the franchisee. For instance, transactions or services provided by an affiliate of the franchisor could be subject to scrutiny regarding fair pricing and terms.
The Franchise Agreement for Embassy Suites By Hilton specifies that Hilton Franchise Holding LLC ('we,' 'us,' 'our' or 'Franchisor') enters into an agreement with the Franchisee ('you,' 'your' or 'Franchisee'). Hilton Franchise Holding LLC is identified as an Affiliate of Hilton Worldwide. Hilton Worldwide and its Affiliates own, license, lease, operate, manage, and provide various services for the Network. This structure indicates that the franchisee will be interacting with a specific entity (Hilton Franchise Holding LLC) that is part of a larger network of affiliated companies under Hilton Worldwide.
Prospective franchisees should carefully evaluate the implications of these affiliate relationships, particularly in areas such as supply chain management, technology systems, and marketing support. It is essential to ascertain the roles and responsibilities of each affiliate and how they may affect the franchisee's operations and profitability. Furthermore, franchisees should ensure that the terms and conditions of any agreements with affiliates are clearly defined and protect their interests.