What are the liquidated damages for opening an Embassy Suites By Hilton hotel before the Opening Date?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
chitect, general contractor or other certified professional provides us with a certificate stating that the as-built premises comply with all Laws relating to accessibility/accommodations/facilities for those with disabilities;
- 6.4.3.2 you have complied with all the terms and conditions in this Agreement;
- 6.4.3.3 your staff has received adequate training and instruction in the manner
we require;
- 6.4.3.4 you have received authorization to open the Hotel from the relevant governmental authority for the jurisdiction in which the Hotel is located, if applicable; and
- 6.4.3.5 all fees and charges you owe to us or our Affiliates have been paid.
- 6.4.4 Opening the Hotel before the Opening Date is a material breach of this Agreement.
- 6.4.4.1 You will pay us Liquidated Damages in the amount of Five Thousand Dollars ($5,000) per day if y
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, opening an Embassy Suites By Hilton hotel before the agreed-upon Opening Date constitutes a material breach of the franchise agreement. In such a case, the franchisee is liable for liquidated damages.
Specifically, Embassy Suites By Hilton will charge the franchisee $5,000 per day for each day the hotel is open before the Opening Date. This fee is intended to compensate Embassy Suites By Hilton for the damages resulting from the early opening.
In addition to these daily liquidated damages, the franchisee is also responsible for reimbursing Embassy Suites By Hilton for all costs and expenses, including legal fees, that the franchisor incurs while enforcing its rights under the franchise agreement due to the early opening. The FDD states that these liquidated damages are a reasonable estimate of the minimum compensation for damages suffered by Embassy Suites By Hilton.
It is important to note that these liquidated damages do not exclude any other legal remedies that Embassy Suites By Hilton may pursue. Therefore, franchisees should ensure they adhere to the agreed-upon Opening Date to avoid these financial penalties and potential legal actions.