How does the termination of the Franchise Agreement affect the Embassy Suites By Hilton HITS Agreement?

According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, a default by the customer (franchisee) under the Technology Service Provider (TSP) Agreement will also constitute a default under the Hilton Information Technology System Agreement (HITS Agreement). In such a case, Hilton Systems Solutions (HSS) can then exercise any of its rights as provided under the HITS Agreement.

Conversely, the FDD states that if the franchisee defaults under the HITS Agreement, it will be considered a default and breach of condition under the TSP Agreement. This interconnectedness means that any violation of either agreement can trigger consequences for the other, giving HSS broad latitude in enforcing compliance.

For a prospective Embassy Suites By Hilton franchisee, this reciprocal default clause highlights the importance of understanding and adhering to both the TSP and HITS Agreements. Failure to meet the obligations in either agreement can lead to repercussions under both, potentially impacting the franchisee's relationship with HSS and their ability to utilize essential technology services. Franchisees should carefully review both agreements and seek clarification on any ambiguous terms to avoid unintentional defaults.