Does the Embassy Suites By Hilton Guaranty specify any limitations on the Guarantor's liability?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
[INSERT THIS CLAUSE FOR EACH SITE-RELATED GUARANTY (TIC OR OTHERWISE):]
9. [Possible Termination of Guaranty. Franchisor will offer Guarantor its then-current standard form termination of guaranty agreement releasing Guarantor from future Obligations under this Guaranty if the following conditions are met: (a) Franchisor receives a copy of the deed evidencing that Franchisee owns fee simple title to the real property on which the Hotel is or will be sited or a copy of a ground lease to which Franchisee is a party with an unrelated third-party ground lessor for a term at least equal to the term of the Franchise Agreement; (b) Guarantor sends a written request to Franchisor to terminate the Guaranty; and (c) at the time of Guarantor's request, Franchisee is in good standing under the Franchise Agreement and has not been in default under the Franchise Agreement at any time during the twenty-four (24) month period before Guarantor's request.]
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the Guaranty agreement includes a clause that allows for possible termination of the guaranty under specific conditions. The franchisor, Hilton Franchise Holding LLC, will offer the guarantor their standard form termination of guaranty agreement, releasing the guarantor from future obligations if certain requirements are met.
The conditions for termination include the franchisor receiving a copy of the deed showing that the franchisee owns the real property where the hotel is located, or a copy of a ground lease with an unrelated third party for a term at least equal to the term of the Franchise Agreement. Additionally, the guarantor must send a written request to the franchisor to terminate the Guaranty.
Finally, at the time of the guarantor's request, the franchisee must be in good standing under the Franchise Agreement and must not have been in default under the Franchise Agreement at any time during the 24-month period before the guarantor's request. This clause provides a potential limitation on the guarantor's liability, as it allows for release from future obligations if these conditions are satisfied.