What section of the Embassy Suites By Hilton franchise agreement outlines the grant of license?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
2.0 GRANT OF LICENSE
2.1 Non-Exclusive License. We grant to you and you accept a limited, non-exclusive License to use the Marks and the System during the Term at, and in connection with, the operation of the Hotel in accordance with the terms of this Agreement. [INSERT ONLY FOR CV DEALS: Provided, however, that 1) your right to operate the Hotel under the Brand will not become effective until after any existing thirdparty franchise, management or similar agreement for the Hotel has terminated or expired; and 2) you are solely responsible for ensuring that any existing third-party franchise, management or similar agreement has terminated or expired on or before the Opening Date.]
2.2 Reserved Rights.
2.2.1 This Agreement does not limit our right, or the right of our Affiliates, to own, license or operate any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a Competing Brand, or otherwise. We and our Affiliates have the right to engage in any Other Businesses, even if they compete with the Hotel, the System, or the Brand, and whether we or our Affiliates start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, or associate with, such Other Businesses.
2.2.2 We may also:
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, Section 2.0 of the franchise agreement outlines the grant of license. Specifically, section 2.1 states that Embassy Suites By Hilton grants the franchisee a limited, non-exclusive license to use the Marks and the System during the Term. This license is specifically for the operation of the Hotel in accordance with the terms of the agreement.
This means that as a franchisee, you are authorized to use Embassy Suites By Hilton's trademarks and operational systems for a specific period, as defined in the agreement, to run your hotel. However, this license is non-exclusive, meaning that Embassy Suites By Hilton can grant similar licenses to other franchisees in the same area or market.
Section 2.2.1 further clarifies that the agreement does not limit Embassy Suites By Hilton's rights, or the rights of its affiliates, to own, license, or operate any other business, even if it competes with the franchisee's hotel. This includes businesses under the Embassy Suites By Hilton brand, a competing brand, or otherwise. Embassy Suites By Hilton and its affiliates can engage in other businesses, even if they compete with the Hotel, the System, or the Brand.
This clause highlights a potential risk for franchisees, as Embassy Suites By Hilton retains the right to operate competing businesses, which could impact the franchisee's market share and profitability. Prospective franchisees should carefully consider this aspect and evaluate the potential for competition from Embassy Suites By Hilton or its affiliates when assessing the franchise opportunity.