Under what conditions will the Embassy Suites By Hilton letter agreement automatically terminate?

According to the 2025 Embassy Suites By Hilton FDD, the letter agreement between the franchisor, franchisee, and lender will automatically terminate under specific conditions. These conditions primarily relate to changes in the lender's relationship with the franchisee or the loan itself.

Specifically, the letter agreement will terminate if the lender no longer has a security interest in the franchisee, or if the loan is paid in full. This protects Embassy Suites By Hilton's interests by ensuring the agreement is no longer in effect when the lender's financial stake is resolved. The agreement also terminates if the lender transfers the loan to another entity, unless the letter agreement is properly assigned to that new entity, maintaining control over who the franchisor is dealing with.

Additionally, the letter agreement will terminate if the lender materially breaches the agreement, if the lender is taken over by a state or federal agency, if the franchisee transfers the Franchise Agreement resulting in a new franchise agreement, or if Embassy Suites By Hilton terminates the Franchise Agreement according to the terms outlined in the letter agreement. These conditions ensure that Embassy Suites By Hilton can end the agreement if the lender fails to uphold their obligations, undergoes significant changes in control, or if the underlying franchise relationship is altered or terminated.