Under what conditions can Embassy Suites By Hilton terminate a franchise agreement before its expiration?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding any other provision of this letter agreement, Franchisor may terminate the Franchise Agreement if any of the following occur: (i) Franchisee's default or any subsequent default, in the sole opinion of Franchisor, damages the image or reputation of Franchisor or any brand name owned and/or licensed by Hilton Worldwide Holdings Inc., a Delaware corporation, or its subsidiaries or affiliates (collectively, "Hilton"); (ii) Franchisor is required to terminate the Franchise Agreement by court order or action of any trustee in bankruptcy or debtor in possession of the Hotel; or (iii) the Additional Period expires without other arrangements satisfactory to Franchisor in its sole discretion having been entered into between Franchisor and Lender.
- (d) Expiration of Franchise Agreement. Nothing in this letter agreement will extend the Franchise Agreement beyond its stated expiration date.
Source: Item 23 — RECEIPTS (FDD pages 97–304)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the franchisor has specific rights regarding the termination of the franchise agreement prior to its natural expiration. Specifically, Embassy Suites By Hilton can terminate the Franchise Agreement if the franchisee's default, or any subsequent default, damages the image or reputation of Embassy Suites By Hilton or any brand name owned or licensed by Hilton Worldwide Holdings Inc., its subsidiaries, or affiliates. This clause underscores the importance Embassy Suites By Hilton places on maintaining its brand integrity and reputation.
Additionally, Embassy Suites By Hilton can terminate the franchise agreement if required to do so by a court order or action of any trustee in bankruptcy or debtor in possession of the hotel. This provision protects Embassy Suites By Hilton's interests in situations where legal or financial constraints necessitate the termination of the agreement. Furthermore, Embassy Suites By Hilton may terminate the agreement if an Additional Period expires without arrangements satisfactory to Embassy Suites By Hilton, in its sole discretion, having been entered into between Embassy Suites By Hilton and the lender.
These termination rights are included in a letter agreement and are applicable notwithstanding any other provision of the letter agreement. However, the letter agreement specifies that nothing within it will extend the Franchise Agreement beyond its originally stated expiration date. These conditions provide Embassy Suites By Hilton with recourse in cases of franchisee default, legal mandates, or failure to reach satisfactory arrangements with lenders, while also clarifying that the agreement's term remains unchanged.