For an Embassy Suites By Hilton franchise, what is the relationship between the 'Equity Owner' and the 'Equity Interest'?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
12.2.1.2.3 Transfer on Death. On the death of Franchisee or an Equity Owner who is a natural person, this Agreement or the Equity Interest of the deceased Equity Owner may Transfer in accordance with such person's will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution of such person's estate, provided that: (a) the transfer on death is to an immediate family member or to a legal entity formed by such family member(s); and (b) within one (1) year after the death, such family member(s) or entity meet all of our then-current requirements for an approved Transferee.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, an Equity Owner's Equity Interest can be transferred upon the Equity Owner's death. Specifically, if the Equity Owner is a natural person, their Equity Interest may transfer in accordance with their will or state intestacy laws.
However, this transfer is conditional. First, the transfer must be to an immediate family member or a legal entity formed by immediate family members. Second, within one year of the Equity Owner's death, the family member or entity must meet all of Embassy Suites By Hilton's then-current requirements for an approved transferee.
This clause provides a mechanism for the smooth transition of ownership in the event of the death of an Equity Owner, ensuring that the franchise can continue to operate without disruption, provided the specified conditions are met. It also allows the Equity Owner to pass their interest to their immediate family members.