Can Embassy Suites By Hilton transfer its contractual obligations to the franchisee?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Acquisition and Franchise Agreement Assumption. [DELETE FIRST SENTENCE ONLY IF ¶ 2(a) IS DELETED: If Lender does not deliver the Waiver Notice to Franchisor under Subparagraph 2(a), the Franchise Agreement will continue in full force and effect. ] If Lender acquires possession and/or ownership of the Hotel as the result of an Acquisition, Lender will be deemed to have assumed the Franchise Agreement as of the date of the Acquisition.
Lender will be obligated to perform all of the obligations of Franchisee under the Franchise Agreement existing at or accruing after the Acquisition date, including the payment of fees owed to Franchisor ("Assumption").
Any conditions in the transfer provisions of the Franchise Agreement that Franchisor deems relevant shall apply with respect to the Assumption, including but not limited to the obligation for Lender to submit its ownership structure, organizational documents and evidence of insurance.
Lender must, within ten (10) business days after receipt of a request from Franchisor, provide to Franchisor all information necessary for Franchisor to determine that Lender is not a Sanctioned Person (as defined below), as well as the other information reasonably requested.
If Franchisor confirms that Lender is not a Sanctioned Person, Franchisor will promptl
Source: Item 23 — RECEIPTS (FDD pages 97–304)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, a lender who acquires the hotel property through an acquisition can assume the obligations of the franchisee under the franchise agreement. Specifically, if a lender gains possession or ownership of the hotel due to an acquisition, they are considered to have assumed the Franchise Agreement from the date of the acquisition.
The lender is then obligated to fulfill all the franchisee's duties under the Franchise Agreement that exist or accrue after the acquisition date. This includes paying any fees owed to Embassy Suites By Hilton. The lender may also need to provide information to Embassy Suites By Hilton to ensure they are not a Sanctioned Person and must adhere to any relevant transfer provisions in the Franchise Agreement, such as submitting ownership structure, organizational documents, and evidence of insurance.
Within ten business days of a request from Embassy Suites By Hilton, the lender must provide all necessary information to confirm they are not a Sanctioned Person and any other reasonably requested information. If Embassy Suites By Hilton confirms the lender is not a Sanctioned Person, they will promptly prepare an amendment to the Franchise Agreement to document the assumption.