Will I receive an exclusive territory as an Embassy Suites By Hilton franchisee?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
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If you will operate an eforea spa, you must open the spa by the date we specify, which will generally be within 12 months after the date you sign the Spa Amendment.
ITEM 12 TERRITORY
We grant franchisees a non-exclusive license to use the System during the term of the Franchise Agreement to operate a franchised hotel at a specified location. There are no provisions in the standard Franchise Agreement granting franchisees a protected area or territory. You will not receive an exclusive territory. You may face competition from other franchisees, from hotels that our affiliates own, or from other channels of distribution or competitive brands that we control. The standard Franchise Agreement permits us to own, operate, manage, franchise, license, lease, or affiliate or associate with any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a competitive brand, or otherwise, at any time and in any location. We and our affiliates have the right to engage in any Other Businesses, even if they compete with your Hotel, the Brand, System Hotels, or Network Hotels, and whether we or our affiliates start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, affiliate or associate with, such Other Businesses.
We may also: (a) modify the System by adding, altering, or deleting elements of the System; (b) use or license to others all or part of the System; (c) use the facilities, programs, services and/or personnel used in connection with the System in Other Businesses; and (d) use the System, the Brand, and the Marks in the Other Businesses. You acknowledge and agree that you have no rights to, and will not make any claims or demands for, damages or other relief arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including, but not limited to, liability for claims for unfair competition, breach of contract, breach of any applicable implied covenant of good faith and fair dealing, or divided loyalty.
Source: Item 12 — TERRITORY (FDD pages 67–70)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, franchisees do not receive an exclusive territory. The FDD states that the franchise agreement grants a non-exclusive license to operate a franchised hotel at a specific location during the term of the agreement.
Embassy Suites By Hilton may offer a "Restricted Area Provision" for New Development or Conversion franchises, but this is not standard. If granted, the Restricted Area is determined by the immediate market and competitive circumstances at the time of signing the Franchise Agreement. The boundaries of a Restricted Area can vary in size and shape from hotel to hotel and are not delineated by a standard formula. These boundaries may be defined by cities, counties, streets, or a specified distance from the hotel.
Even with a Restricted Area Provision, several exclusions apply. The provision does not protect against previously existing hotels managed or licensed by Embassy Suites By Hilton or its affiliates, nor does it protect against replacement hotels. Additionally, the Restricted Area Provision typically restricts Embassy Suites By Hilton and its affiliates from operating or authorizing another Brand hotel within the Restricted Area during the Restrictive Period, but it excludes other brands or product lines containing "Embassy" in the name, as well as other Hilton brands. The Restrictive Period is generally shorter than the full term of the Franchise Agreement.
Embassy Suites By Hilton retains the right to operate or franchise other businesses, including competitive brands, at any location, regardless of whether it impacts a franchisee's hotel. Franchisees may also face competition from other franchisees, hotels owned by affiliates, and other distribution channels controlled by Embassy Suites By Hilton. The FDD emphasizes that there is no mechanism for resolving conflicts that may arise between a franchisee's hotel and other Network Hotels, and any resolution is at the sole discretion of Hilton Worldwide and Embassy Suites By Hilton.