Can an Embassy Suites By Hilton franchisee operate another spa in or adjacent to the Hotel?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
Lease; Competition; Transfer.
Notwithstanding anything set forth in the Franchise Agreement to the contrary, you understand and acknowledge that: (i) you may not lease or sublease commercial space in your eforea spa, or enter into concession arrangements for operations in connection with your eforea spa; (ii) neither you nor any affiliate may operate, have operated on your behalf or on behalf of an affiliate, or allow the operation of, another spa in, adjacent to or that is associated in any way with, the Hotel; (iii) you may not enter into a Change of Ownership Transfer for your Hotel unless you are also transferring your eforea spa in the same transaction and you may not enter into a Change of Ownership Transfer for your eforea spa unless you are also transferring your Hotel in the same transaction; and (iv) any Restricted Area granted by Franchisor shall not apply to Franchisee with respect to its eforea spa.
Further, in any transaction referred to in clause (ii) above, the Transferee for your Hotel and the spa operated as part of your Hotel must be the same entity.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, if a franchisee chooses to operate an eforea spa in conjunction with their hotel, they are restricted from operating any other spa in or near the hotel. Specifically, neither the franchisee nor any affiliate is allowed to operate, have operated on their behalf, or allow the operation of another spa in, adjacent to, or associated with the Embassy Suites By Hilton hotel.
This restriction is outlined in the Eforea Spa Amendment to the Franchise Agreement, which details the terms and conditions for operating an eforea spa at the hotel site. The amendment emphasizes that the franchisee's rights to operate the hotel and the spa are intertwined. If a franchisee transfers ownership of the hotel, they must also transfer ownership of the eforea spa in the same transaction, and vice versa. The transferee for both the hotel and the spa must be the same entity.
This clause ensures that Embassy Suites By Hilton maintains control over the quality and brand consistency of spa services offered at its locations. By preventing franchisees from operating competing spas nearby, Embassy Suites By Hilton aims to protect the reputation and customer experience associated with the eforea spa brand. This restriction is a significant consideration for prospective franchisees who may have existing spa businesses or plans to develop additional spa facilities in the vicinity of the hotel.