What section of the Embassy Suites By Hilton franchise agreement discusses transfers of the franchise?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
12.2.1.2.3 Transfer on Death. On the death of Franchisee or an Equity Owner who is a natural person, this Agreement or the Equity Interest of the deceased Equity Owner may Transfer in accordance with such person's will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution of such person's estate, provided that: (a) the transfer on death is to an immediate family member or to a legal entity formed by such family member(s); and (b) within one (1) year after the death, such family member(s) or entity meet all of our then-current requirements for an approved Transferee.
12.2.2 Change of Ownership Transfer. A Change of Ownership Transfer is any Transfer that will result in a change of Control of you, the Hotel or the Hotel Site, or is not otherwise described in Subsection 12.2.1. We will have sixty (60) days from our receipt of the completed and signed franchise application to consent or withhold our consent to any proposed Change of Ownership Transfer. Our consent will not be unreasonably withheld. You consent to our communication with any third party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer. Our consent to the Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date of closing the Change of Ownership Transfer ("Closing"):
12.2.2.1 Transferee submits a completed and signed Change of Ownership Application, pays our then-current franchise application fee, executes our then-current form of franchise agreement, and all required ancillary documents. If all conditions to our consent are fulfilled, the date of Closing will be the termination date of this Agreement, and the effective date of Transferee's franchise agreement;
12.2.2.2 you are not in default of this Agreement or any other agreements with
us or our Affiliates;
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, Section 12 of the franchise agreement outlines the conditions and procedures for transferring ownership of the franchise. Specifically, Subsections 12.2.1.2.3 and 12.2.2 address different types of transfers.
Subsection 12.2.1.2.3 details the process for transferring the franchise upon the death of the franchisee or an equity owner who is a natural person. In such cases, the agreement or equity interest can be transferred according to the deceased person's will or intestacy laws, provided that the transfer is to an immediate family member (or a legal entity formed by them) and that the family member(s) or entity meet Embassy Suites By Hilton's requirements for an approved transferee within one year of the death.
Subsection 12.2.2 describes transfers that result in a change of control of the franchisee, the hotel, or the hotel site, or that are not otherwise described in Subsection 12.2.1. Embassy Suites By Hilton has 60 days to either consent to or withhold consent for any proposed change of ownership transfer after receiving the completed and signed franchise application. Consent will not be unreasonably withheld, and Embassy Suites By Hilton is allowed to communicate with third parties about the hotel to evaluate the proposed transfer. The closing of the transfer is contingent on several conditions, including the transferee submitting a completed application, paying the franchise application fee, executing the current franchise agreement, and ensuring that the current franchisee is not in default of any agreements with Embassy Suites By Hilton or its affiliates. If all conditions are met, the closing date will also be the termination date of the existing agreement and the effective date of the new franchisee's agreement.