Under what conditions can HSS terminate the agreement with an Embassy Suites By Hilton customer?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
HSS may terminate the above Equipment License on the Network Authorized Equipment and all other obligations of HSS under this TSP Agreement at HSS's option: (a) Immediately without notice in event of breach of Customer's obligations or conditions set forth in Sections 2 and 3 above, or (b) at any time, with or without cause, upon not less than ninety (90) days advance written notice to Customer.
Any default by Customer under this TSP Agreement will constitute a default by Customer under the HITS Agreement, and, in such event, HSS may exercise any of its rights provided under the HITS Agreement.
Any default by Customer under the HITS Agreement will constitute a default and breach of condition by Customer under this TSP Agreement.
Termination of the HITS Agreement will result in termination of this TSP Agreement.
Upon termination of this TSP Agreement, Customer will be required to assume any remaining lease payments of HSS as to the Network Authorized Equipment that is provided Customer pursuant to this TSP Agreement or to purchase such equipment from HSS's lessor. The costs (which will vary depending upon the equipment involved and the timing of the termination) and the various options available will be sent to Customer at the time of the notification of the upcoming termination. Upon termination of this TSP Agreement, HSS will pass on to Customer, and Customer will be responsible for, all subsequent fees and costs of Equipment Maintenance and Software Maintenance. If a termination occurs before the expiration of three (3) years since HSS incurred installation and/or service fees and costs in performing a refreshment of Network Authorized Equipment ("Refresh Costs"), then Customer will also reimburse HSS for the unamortized value (on a monthly basis over a thirty-six (36) month period) of such Refresh costs.
In addition, if this TSP Agreement is terminated (or if Customer's use of the Preferred Provider is terminated), Customer will pay to HSS a termination fee which is designed to reimburse the Preferred Provider and/or HSS in part for unamortized or otherwise uncovered costs, including without limitation costs of Certified Third Party Software and costs incurred in the start up and provision of maintenance services by the Preferred Provider under the HITS Agreement. If such termination occurs or if Customer's use of the Preferred Provider is terminated following during the first year following the shipment date of the Network Authorized Equipment to Customer's Hotel ("Start Date"), the termination fee will be in the amount of $3,600.00.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, HSS (Hilton Systems Solutions, LLC) has the right to terminate the Total Solution Program (TSP) Agreement under specific conditions. HSS can terminate the Equipment License on the Network Authorized Equipment and all other obligations under the TSP Agreement immediately without notice if the customer breaches any obligations or violates any conditions outlined in Sections 2 and 3 of the agreement. Alternatively, HSS can terminate the agreement at any time, with or without cause, by providing the customer with at least ninety (90) days advance written notice.
Furthermore, any default by the customer under the TSP Agreement constitutes a default under the HITS (Information Technology Systems) Agreement, allowing HSS to exercise its rights under the HITS Agreement. Conversely, any default by the customer under the HITS Agreement also constitutes a default and breach of condition under the TSP Agreement. Termination of the HITS Agreement will result in termination of the TSP Agreement.
If the TSP Agreement is terminated, the Embassy Suites By Hilton franchisee is required to assume any remaining lease payments for the Network Authorized Equipment or purchase the equipment from HSS's lessor. The franchisee will also be responsible for all subsequent fees and costs of Equipment Maintenance and Software Maintenance. Additionally, if termination occurs before the expiration of three years since HSS incurred installation and/or service fees in refreshing the Network Authorized Equipment, the franchisee must reimburse HSS for the unamortized value of these Refresh Costs, calculated on a monthly basis over a thirty-six month period. The franchisee may also be subject to a termination fee of $3,600 if the termination occurs within the first year of the equipment shipment date.