Does Baymont Inn Suites or its affiliates profit from items sold to franchisees?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
o offer discounts or other benefits to our franchisees.
Approved Suppliers generally pay WSSI a commission based upon the volume of sales to franchisees. Commissions typically are a percentage of net or gross sales to franchisees, and usually range from 0% to 5% of net or gross sales to franchisees, but sometimes as high as 10%. WSSI may enter into other commission arrangements with Approved Suppliers from time to time, such as a fixed fee per purchase order, on the basis of arms' length negotiations.
In 2024, our and the Lodging Affiliates' net revenues from franchisees' purchases of products or services required by or subject to our or the Lodging Affiliates' respective System Standards was approximately $7.9 million, or approximately 0.56% of WHR's total net revenues of $1.408 billion (as reflected in its consolidated statements of income (loss) for 2024); and our and the Lodging Affiliates' net revenues from franchisees' purchases of optional products or services was approximately $9.0 million, or approximately 0.64% of WHR's total net revenues of $1.408 billion.
None of our officers owns a material interest in any supplier to our System. However, from time to time, our officers may own non-material interests, for investment purposes only, in publicly held companies that are suppliers to our System.
Required Purchases from Approved Suppliers
The only items you must buy from an Approved Supplier are items bearing the Marks (such as signage, supplies, and digital photographs), certain elements necessary to create a brand-defining ambience (such as music, scent, or specific décor); items and/or services related to health and safety (which includes sanitation and cleanliness); the firm you retain to prepare a market feasibility study for your Facility (if any); and certain technology systems, including guest wireless high-speed internet access, credit card acquiring services; and your PMS (although you will pay us, or an affiliate, for certain services related to your PMS, and may be required to pay us, or an affiliate, for certain services related to your guest wireless high-speed internet access system). There may be only one Approved Supplier for certain items bearing the Marks or related to health and safety and we do not plan to approve other suppliers. We have approved two different brands of PMS, but only one supplier for each brand. In addition, there is only one Approved Supplier for the credit card gateway services you must use with one of the PMSs. Otherwise, you can purchase items
from any party you wish as long as the items meet our System Standards. We may designate sole Approved Suppliers for various items, which may include us or an affiliate. We and our affiliates intend to make a profit on any items we or they sell to you.
If you choose to purchase certain design elements from a supplier other than an Approved Supplier, you must provide us your custom interior design drawings for our review to ensure compliance with our standards, and we may charge a fee for such review. You must use our call center to book reservations from customers who call your Facility to make a reservation. See Items 5 and 6. These are the only services that you must purchase or lease from us or an affiliate and neither we nor any of our affiliates are currently the sole Approved Supplier for any other item.
We may offer, in our sole discretion as business circumstances warrant, certain "Development Incentives" that may be disbursed to you or to a third party on your behalf, for the approved use of constructing or renovating your hotel (see Item 10). If the Development Incentive is to be issued to you, we may require you to use the services of an approved procurement service provider or purchase approved goods directly from a manufacturer or Approved Supplier. The fee procurement services providers charge is typically 11% to 17% of the total cost of the furniture, fixtures, and/or equipment purchased.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 53–56)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, Baymont Inn Suites and its affiliates do profit from the sale of items to franchisees. Approved Suppliers generally pay WSSI, an affiliate, a commission typically ranging from 0% to 5% of net or gross sales to franchisees, but sometimes as high as 10%. These commissions are based on the volume of sales to franchisees. In 2024, net revenues from franchisees' purchases of required products or services was approximately $7.9 million, or approximately 0.56% of WHR's total net revenues of $1.408 billion. Net revenues from franchisees' purchases of optional products or services was approximately $9.0 million, or approximately 0.64% of WHR's total net revenues of $1.408 billion.
Baymont Inn Suites may designate sole Approved Suppliers for various items, which may include Baymont Inn Suites or an affiliate. Baymont Inn Suites and its affiliates intend to make a profit on any items they sell to franchisees. The only items franchisees must buy from an Approved Supplier are items bearing the Marks (such as signage, supplies, and digital photographs), certain elements necessary to create a brand-defining ambience (such as music, scent, or specific décor); items and/or services related to health and safety (which includes sanitation and cleanliness); the firm you retain to prepare a market feasibility study for your Facility (if any); and certain technology systems, including guest wireless high-speed internet access, credit card acquiring services; and your PMS.
Franchisees are not required to purchase or lease products or services from Baymont Inn Suites or its affiliates, from suppliers approved by them, or under their specifications, except as disclosed in the FDD. However, to ensure consistency among Chain Facilities, each Facility must meet System Standards. These standards require that most of the items franchisees use or sell at their Facility meet Baymont Inn Suites's specifications. Items that must meet their specifications include certain aspects of the Facility's construction and operation (including insurance); certain services you offer in the Facility, including food and beverage services; the Facility's equipment, décor and amenities, guest room size, signage, photographs, advertising, furniture and fixtures, various supplies, bath and bed linens, window treatments, bed topping, mattresses and box springs, flooring, wall coverings, lighting, wireless high-speed Internet access, PMS, computer hardware and peripheral equipment, operating system software, and telephone and lock systems; and in certain circumstances your third-party manager or management company and management agreement. Baymont Inn Suites estimates that the items franchisees purchase meeting System Standards will represent approximately 25% to 50% of their total initial expenditures for goods and services in establishing a new construction or conversion Facility and approximately 10% to 15% of their annual purchases and leases.
If Baymont Inn Suites offers Development Incentives, they may require franchisees to use the services of an approved procurement service provider or purchase approved goods directly from a manufacturer or Approved Supplier. The fee procurement services providers charge is typically 11% to 17% of the total cost of the furniture, fixtures, and/or equipment purchased.