What conditions must be met before the Development Incentive is disbursed for a Baymont Inn Suites franchise?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
advance notice or amendment of this Franchise Disclosure Document.
The Development Incentive will be disbursed after (i) you have passed a final credit review with no material adverse changes in your business, legal, litigation, bankruptcy status or finances, or of your guarantors or the Facility since preliminary approval, (ii) the Facility officially opens with our consent, (iii) you have completed all required pre-opening improvements specified in the Franchise Agreement; (iv) you have paid the Initial Fee; (v) you are in good standing under the Franchise Agreement and all ancillary agreements; and (vi) you have completed any other pre-requisites for disbursement that you and we agree to in the Franchise Agreement. Additionally, we may require you to use the services of an approved procurement service provider, or purchase directly from a manufacturer or approved supplier, as outlined below.
We may offer to issue the Development Incentive in cash or disbursed to a third party on your behalf for the approved use of constructing your hotel, in our sole discretion as business circumstances warrant. If the Development Incentive is to be issued in cash, we may require you to use the services of an approved procurement service provider or purchase directly from a manufacturer or approved supplier. The fee for procurement services is typically 11% - 17% of the total cost of the furniture, fixtures and equipment purchased.
You and your guarantors or co-makers waive traditional defenses, as described above for the Initial Fee Note. With or without notice to or consent from you, your guarantors or co-makers, we may grant renewals, extensions, modifications, compositions, compromises, releases or discharges of other parties. If you transfer the Facility, you must repay the balance of the Development Incentive Note unless the transferee and its principals assume the obligation to repay the Incentive and provide us with such other security as we may require in our sole discretion. If you are purchasing an existing Chain Facility and we approve you to assume the obligation to repay the unamortized balance of the Development Incentive Note, then you must agree to assume all of the same terms under the Development Incentive Note as the original recipient of the Development Incentive.
Women Own the Room ("WOTR") Development Incentive. We offer a special financing program intended to empower women entrepreneurs through hotel ownership. We will provide an approved womenowned franchisee a Development Incentive at a target amount of $2,500 per guest room of the Facility, but not to exceed 50% of the franchisee's equity investment in the Facility.
Source: Item 10 — FINANCING (FDD pages 59–61)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, several conditions must be met before the Development Incentive is disbursed. First, the franchisee and their principals must sign a Development Incentive Note, specifying the incentive amount, and if applicable, spouses must co-sign if they reside in community property or certain other states. An addendum to the Franchise Agreement must be signed, agreeing to make all payments via electronic funds transfers through the ACH system. Baymont Inn Suites also requires a current balance sheet, loan documents, and other information detailing the total cost of the facility, the amount being financed, and the franchisee's equity investment.
Furthermore, the Development Incentive will be disbursed only after the franchisee has passed a final credit review with no material adverse changes in their business, legal, litigation, bankruptcy status, or finances, or of their guarantors or the Facility since preliminary approval. The facility must officially open with Baymont Inn Suites's consent, and all required pre-opening improvements specified in the Franchise Agreement must be completed. The franchisee must have paid the Initial Fee and be in good standing under the Franchise Agreement and all ancillary agreements. Any other pre-requisites for disbursement agreed upon in the Franchise Agreement must also be completed.
Baymont Inn Suites may also require the franchisee to use the services of an approved procurement service provider or purchase directly from a manufacturer or approved supplier. The Development Incentive may be issued in cash or disbursed to a third party on the franchisee's behalf for constructing the hotel, at Baymont Inn Suites's discretion. It's important to note that if a Development Incentive is offered, the franchisee may not be eligible for any reduction in Initial or Recurring Fees. The Development Incentive program can be modified, limited, extended, or terminated at any time without prior notice or amendment to the Franchise Disclosure Document, adding an element of uncertainty for prospective franchisees.