Must an Embassy Suites By Hilton franchisee comply with all applicable laws?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) Guarantor represents, warrants and covenants to Franchisor that Guarantor, including its directors, officers, senior management, shareholders and other persons having a controlling interest in Guarantor: (i) is not, and, to your actual or constructive knowledge, is not owned or controlled by, or acting on behalf of, Sanctioned Persons or, to Guarantor's actual knowledge, otherwise the target of Trade Restrictions; (ii) have not and will not obtain, receive, transfer or provide any funds, property, debt, equity or other financing related to the Franchise Agreement and the Hotel or Hotel Site to/from any entity that qualifies as a Sanctioned Person or, to your actual or constructive knowledge, is otherwise the target of any applicable Trade Restrictions' (iii) Guarantor is familiar with the provisions of applicable Anti-Corruption Laws and shall comply with applicable Anti-Corruption Laws in performance of its obligations under or in connection with this Guaranty and the Franchise Agreement and any related agreements; (iv) any funds received or paid in connection with entry into or performance of this Guaranty have not been and will not be derived from or commingled with the proceeds of any activities that are proscribed and punishable under the criminal laws of the United States, and that Guarantor is not engaging in this transaction in furtherance of a criminal act, including acts in violation of applicable Anti-Corruption Laws; (v) in preparation for and in entering into this Guaranty, Guarantor has not 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 Guaranty or the performance of Guarantor's obligations under this Guaranty, you will not 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; (vi) except as otherwise disclosed in writing to Franchisor, neither Guarantor, nor, to your actual or constructive knowledge, any of its direct or indirect shareholders (including legal or beneficial shareholders), officers, directors, employees, agents or other persons designated by you to act on your own behalf or receive any benefit under this Guaranty, is a Government Official; (vii) any statements, oral, written, electronic or otherwise, that Guarantor submits to Franchisor, Franchisor Affiliate, or any third party in connection with the representations, warranties, and covenants described in this Subsection are truthful and accurate and do not contain any materially false or inaccurate statements; (viii) Guarantor will make reasonable efforts to assure that its respective appointed agents in relation to this Guaranty comply in all material respects with the representations, warranties, and covenants described in this Subsection; and (ix) will notify Franchisor
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, a franchisee must comply with all applicable Anti-Corruption Laws. The FDD specifies that the Guarantor, which may include directors, officers, senior management, shareholders, and other persons with a controlling interest, must be familiar with and adhere to these laws in the performance of their obligations under the Guaranty, the Franchise Agreement, and any related agreements.
This obligation extends to ensuring that funds received or paid in connection with the Guaranty are not derived from or commingled with proceeds from activities proscribed by criminal laws of the United States, including Anti-Corruption Laws. Furthermore, the Guarantor must not make any Improper Payment or engage in transactions that violate these laws, either directly or indirectly, during the preparation for or performance of the Guaranty.
The Guarantor also warrants that any statements submitted to Embassy Suites By Hilton, its affiliates, or third parties are truthful and accurate and that they will make reasonable efforts to ensure their appointed agents comply with these representations, warranties, and covenants. The Guarantor is required to notify Embassy Suites By Hilton if they become aware of any issues related to these compliance matters.
This requirement highlights the importance of ethical and legal conduct for anyone involved in the Embassy Suites By Hilton franchise, particularly concerning financial transactions and interactions with government officials. Prospective franchisees should carefully review and understand these obligations to ensure full compliance and avoid potential legal issues.