Under what conditions must an Embassy Suites By Hilton franchisee accept 'Our Offer' from Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not offer the Hotel or Hotel Site to any third party during the 60-day Period.
If the parties are unable to reach agreement despite good faith negotiations in the 60-day Period, you will be deemed to have rejected Our Offer.
- 19.5 If you do not accept Our Offer, or it is deemed rejected, or we waive our right to make an offer, for two hundred seventy (270) days (the "270-day Period"), you or a Controlling Affiliate may Transfer the Marketed Interest to a third party for a price greater than and/or on more favorable terms than the price and terms stated in Our Offer, but you or a Controlling Affiliate must comply with the Transfer provisions in Section 12.2.2 of this Agreement.
If you or a Controlling Affiliate proposes to Transfer the Marketed Interest at a lesser price or on less favorable terms during the 270-day Period, then you must again give us notice of the proposed sale or lease and comply with the provisions of this Section 19.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, a franchisee is considered to have rejected 'Our Offer' if the parties are unable to reach an agreement after negotiating in good faith during a 60-day period. This means that while the franchisee is expected to negotiate with Hilton, they are not obligated to accept the offer if an agreement cannot be reached within that timeframe.
If the franchisee rejects Hilton's offer, or if Hilton waives its right to make an offer, the franchisee has the right to transfer the Marketed Interest to a third party within a 270-day period, provided that the transfer price is greater than or on more favorable terms than Hilton's initial offer. However, the franchisee must still comply with the transfer provisions outlined in Section 12.2.2 of the Franchise Agreement.
Should the franchisee wish to transfer the Marketed Interest at a lower price or on less favorable terms during the 270-day period, they are obligated to notify Hilton again and comply with the provisions of Section 19, which likely involves giving Hilton another opportunity to make an offer. This clause ensures that Hilton retains the first right of refusal or the opportunity to match any lower offers, protecting their brand and investment.