Must the lender notify Embassy Suites By Hilton that it wants the Additional Period?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
If the default is for failure to comply with physical standards or other non-monetary default which could only be cured by Lender acquiring possession and/or ownership of the Hotel (each, an "Acquisition"), Lender may have an additional period of one hundred eighty (180) calendar days, commencing at the expiration of Lender's Cure Period, for Lender to complete its Acquisition, through foreclosure or other appropriate proceedings ("Additional Period"); provided that Lender must: (i) notify Franchisor no later than the date it commences proceedings (or promptly after action is stayed or enjoined) that Lender wants the Additional Period; (ii) commence proceedings and diligently prosecute such proceedings to completion; and (iii) comply with the obligations of Franchisee under the Franchise Agreement not being performed by Franchisee during the Additional Period including payment of all monetary obligations but excluding those obligations which can only be performed by Franchisee or which Lender cannot perform without possession and/or ownership of the Hotel.
Source: Item 23 — RECEIPTS (FDD pages 97–304)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton FDD, if a lender seeks an additional period to complete the acquisition of a hotel due to the franchisee's non-monetary default (such as failure to comply with physical standards), the lender must notify Embassy Suites By Hilton. This notification must occur no later than the date the lender commences proceedings, or promptly after action is stayed or enjoined.
The "Additional Period" provides the lender with 180 calendar days, starting after the Lender's Cure Period, to complete the acquisition through foreclosure or other appropriate proceedings. Besides notifying Embassy Suites By Hilton, the lender must also commence proceedings and diligently pursue them to completion. The lender is also obligated to fulfill the franchisee's obligations under the Franchise Agreement that the franchisee is not performing, including monetary obligations, except for those that only the franchisee can perform or that the lender cannot perform without possession or ownership of the hotel.
Embassy Suites By Hilton may further extend the Additional Period upon the lender's request, considering the time needed to complete the acquisition in the relevant jurisdiction and any periods during which the lender's action has been stayed or enjoined. This process ensures that Embassy Suites By Hilton is informed and that the lender is actively working towards resolving the default and maintaining the standards of the franchise. If Embassy Suites By Hilton has not issued a default notice and the lender cures the default during the Lender's Cure Period and starts proceedings for acquisition, the lender can still exercise its rights under the agreement.
Furthermore, if Embassy Suites By Hilton has not issued a default notice, the lender's notice to Embassy Suites By Hilton regarding the franchisee's default under the loan will initiate the timeline for both the Lender's Cure Period and the Additional Period. This requirement ensures Embassy Suites By Hilton is promptly informed of potential issues and can monitor the situation accordingly.