Can an Embassy Suites By Hilton franchisee demand a renewal of their HITS agreement?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
| Agreement | ||
|---|---|---|
| Change of Ownership: Generally, either the remaining Term | ||
| under the existing franchise agreement, or such other term as | ||
| we may approve. | ||
| Spa Amendment 2 | eforea spa: expires on the earlier of: (i) the termination of the | |
| Spa Amendment or (ii) the expiration or termination of the | ||
| Franchise Agreement. | ||
| HITS Agreement 1.1 | The HITS Agreement will run concurrently with the Franchise | |
| Agreement and will automatically terminate on the termination or | ||
| expiration of the Franchise Agreement. | ||
| b. Renewal or Extension of | FA §3 | You do not have the right to renew or extend the Franchise Agreement, including the Spa Amendment. |
| the term | HITS Agreement Not Applicable | The HITS Agreement will run concurrently with the Franchise Agreement. You do not have the right to renew or extend the HITS Agreement. |
| c. Requirements for you to renew or extend | FA – Not applicable | You do not have the right to renew or extend, but if we agree, in our sole discretion, to re-license, you may be asked to sign a contract with materially different terms and conditions from the original Franchise Agreement, and you must comply with any PIP performance conditions that we specify. |
| HITS Agreement Not Applicable | The HITS Agreement will run concurrently with the Franchise Agreement. You do not have the right to renew or extend, but if we agree, in our sole discretion, to re-license, you may be asked to sign a new HITS Agreement with materially different terms and conditions from the original HITS Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, franchisees do not have a right to renew or extend the HITS (Hilton's Information Technology System) Agreement. The HITS Agreement runs concurrently with the Franchise Agreement, meaning its term is tied directly to the term of the franchise.
The FDD states that if Embassy Suites By Hilton agrees, in its sole discretion, to re-license the franchise, the franchisee may be required to sign a new HITS Agreement. This new agreement could contain terms and conditions that are materially different from the original HITS Agreement.
In the franchise industry, it is common for renewals to be at the franchisor's discretion, especially concerning technology-related agreements that need to keep pace with evolving systems. This lack of a guaranteed renewal for the HITS Agreement means that an Embassy Suites By Hilton franchisee may face new, potentially more costly or demanding, technology requirements if they are granted a franchise renewal.