Under what conditions can Embassy Suites By Hilton disapprove a management company?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
our Hotel. To fulfill this responsibility, your Hotel must be operated either by you or a third-party management company ("Management Company") that we have approved. No other person or entity may operate the Hotel.
We will only grant approval when we consider you or your proposed Management Company to be qualified to manage the Hotel. We may refuse to approve you or any proposed Management Company that, in our reasonable business judgment, is inexperienced or unqualified in managerial skills or operating capacity or capability, or is unable to adhere fully to the obligations and requirements of the Franchise Agreement.
If you wish to manage your Hotel directly, you must have our prior written approval and successfully complete our training program, unless we waive this requirement. If we determine that you are not qualified to operate the Hotel, at any time, we may require you to retain a Management Company that is acceptable to us to manage the Hotel.
If you wish to hire or are required to hire a Management Company to manage your Hotel, you must obtain our prior written approval. Your Management Company must have the authority to perform all of your obligations under the Franchise Agreement, including all indemnity and insurance obligations.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 74–75)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, the brand has specific conditions under which they can disapprove a proposed management company. Embassy Suites By Hilton will only grant approval when they consider the proposed management company qualified to manage the hotel. They may refuse approval if, in their reasonable business judgment, the company is inexperienced or unqualified in managerial skills, operating capacity, or capability. Additionally, a management company may be rejected if it is unable to fully adhere to the obligations and requirements outlined in the Franchise Agreement.
Furthermore, Embassy Suites By Hilton reserves the right to disapprove a management company if it is considered a Competitor or is the exclusive manager for a Competitor through itself or an affiliate. A "Competitor" is defined as any entity that owns, licenses, or franchises a Competing Brand. A "Competing Brand" is a hotel brand or trade name that, in Embassy Suites By Hilton's sole business judgment, competes with the Embassy Suites By Hilton system or any Network Hotel.
If a franchisee's management company becomes a Competitor, the franchisee has 90 days to retain a qualified substitute management company that Embassy Suites By Hilton approves. This condition ensures that the management of the Embassy Suites By Hilton hotel remains aligned with the brand's interests and does not promote competing hotel brands. These stipulations are in place to protect the Embassy Suites By Hilton brand and maintain consistent standards across all franchised locations.