Does Embassy Suites By Hilton have the right to withhold approval at its option, in its business judgment?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.6.1 Wherever our consent or approval is required in this Agreement, unless the provision specifically indicates otherwise, we have the right to withhold our approval at our option, in our business judgment, taking into consideration our assessment of the long-term interests of the System overall.
You agree not to make a claim for money damages based on any allegation that we have unreasonably withheld or delayed any consent or approval to a proposed act by you under the terms of this Agreement.
Your sole remedy for the claim will be an action or proceeding to enforce the provisions of this Agreement by specific performance or by declaratory judgment.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, Embassy Suites By Hilton has the right to withhold approval at its discretion in many situations. Specifically, where consent or approval is required within the franchise agreement, Embassy Suites By Hilton can withhold such approval. This decision will be based on their business judgment and their assessment of the long-term interests of the overall Embassy Suites By Hilton system.
This provision grants Embassy Suites By Hilton significant control over various aspects of the franchise operation, as any action requiring their consent is subject to their approval. This could include decisions related to marketing, renovations, supplier selection, and other operational matters. The franchisee must recognize that Embassy Suites By Hilton's interests in the broader system will take precedence.
However, the agreement also stipulates that a franchisee's sole recourse for a disagreement is to seek specific performance or a declaratory judgment, preventing them from claiming monetary damages for any alleged unreasonable withholding or delay of consent. This limitation on remedies could pose a risk to franchisees who believe Embassy Suites By Hilton has acted unfairly or in bad faith, as the franchisee's legal options are restricted to compelling Embassy Suites By Hilton to act or obtaining a court declaration of rights.