What is prohibited regarding transfers of the Embassy Suites By Hilton agreement or equity interest?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.2 Your Transfer. You understand and acknowledge that the rights and duties in this Agreement are personal to you and that we are entering into this Agreement in reliance on your business skill, financial capacity, and the personal character of you and your officers, directors, partners, members, shareholders or trustees.
A Transfer by you (or by an Equity Owner as of the Effective Date, or by a transferee Equity Owner we later approve) of any Equity Interest, or this Agreement, or any rights or obligations under this Agreement, is prohibited other than as expressly permitted in this Agreement.
In any Transfer by you or any Equity Owner under this Subsection 12.2, the proposed Transferee may not be a Sanctioned Person or a Competitor.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the rights and duties within the franchise agreement are personal to the franchisee. Embassy Suites By Hilton is entering into the agreement based on the franchisee's business skills, financial capacity, and personal character.
A transfer by the franchisee or an equity owner of any equity interest, the agreement itself, or any rights or obligations under the agreement is prohibited unless expressly permitted within the agreement. Furthermore, any proposed transferee cannot be a Sanctioned Person or a Competitor.
However, Embassy Suites By Hilton does permit certain transfers if they meet specific requirements. These permitted transfers include those to an affiliate, transfers to a family member or trust, and transfers upon death, provided certain conditions are met. Additionally, transfers of publicly traded equity interests and transfers of privately held equity interests resulting in less than 50% change in ownership are also permitted under specific conditions.