What sections of the Embassy Suites By Hilton Franchise Agreement cover transfer of the franchise?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
Mezzanine Lender Comfort Letter
Page 4
(c) Lender's Sale to Third Party After Assumption. The transfer provisions of the Franchise Agreement will apply to any sale, assignment or transfer by Lender after an Assumption. If the transfer is to a third party who desires to continue to operate the Hotel, these provisions require a change of ownership application, approval of the third party and payment of an application fee.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 50–52)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the transfer of the franchise after an assumption by a lender is addressed in the Mezzanine Lender Comfort Letter. Specifically, it states that the transfer provisions of the Franchise Agreement will apply to any sale, assignment, or transfer by the lender after they have assumed control.
If the lender sells or transfers the hotel to a third party who wishes to continue operating it as an Embassy Suites By Hilton, the standard change of ownership procedures will be required. This includes submitting a change of ownership application, obtaining approval for the third party from Embassy Suites By Hilton, and paying the applicable application fee.
This clause ensures that Embassy Suites By Hilton maintains control over who operates a franchised hotel even in situations where a lender takes over the property and subsequently sells it. The new potential franchisee will have to go through the same process as any other potential franchisee.