What constitutes a material breach of the Baymont Inn Suites franchise agreement regarding the Marks?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We may terminate this Agreement effective when we send written notice to you or such later date as required by law or as stated in the default notice, when (1) you do not cure a default as provided in Section 11.1 or we are authorized to terminate under Schedule D due to your failure to perform your Improvement Obligation; (2) you discontinue operating the Facility as a Chain Facility; (3) you do or perform, directly or indirectly, any act or failure to act that in our reasonable judgment is or could be injurious or prejudicial to the goodwill associated with the Marks or the System; (4) you lose ownership possession or the right to possession of the Facility or otherwise lose the right to conduct the franchised business at the Location; (5) you (or any guarantor) suffer the termination of another license or franchise agreement with us or one of our affiliates; (6) you intentionally maintain false books and records or submit a materially false report to us; (7) you (or any guarantor) generally fail to pay debts as they come due in the ordinary course of business; (8) you, any guarantor or any of your owners or agents misstated to us or omitted to tell us a material fact to obtain or maintain this Agreement with us; (9) you receive two or more notices of default from us in any one-year period (whether or not you cure the defaults); (10) a violation of Section 9 occurs, or a Transfer occurs before the relicensing process is completed; (11) you or any of your owners contest in court the ownership or right to franchise all or any part of the System or the validity of any of the Marks; (12) you, any guarantor; or the Facility is subject to any voluntary or involuntary bankruptcy, liquidation, dissolution, receivership, assignment, reorganization, moratorium, composition, or a similar action or proceeding that is not dismissed within 60 days after its filing; (13) you maintain or operate the Facility in a manner that endangers the health or safety of the Facility's guests; (14) if a threat to public health or safety exists at the Facility and we reasonably determine that an immediate shut down of the Facility is necessary to avoid substantial risk of liability or goodwill; or (15) you disclose any Confidential Information in violation of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to the 2025 Baymont Inn Suites Franchise Disclosure Document, engaging in actions that could harm the goodwill associated with the Baymont Inn Suites Marks or System constitutes a material breach of the franchise agreement. Specifically, Baymont Inn Suites can terminate the agreement if a franchisee performs any act or omission that, in the franchisor's reasonable judgment, is or could be detrimental to the goodwill connected to the Marks or the System.
This provision gives Baymont Inn Suites broad discretion to terminate the franchise agreement if they believe the franchisee's actions could negatively impact the brand's reputation. This could include actions such as failing to maintain brand standards, engaging in deceptive business practices, or any other conduct that could damage the public's perception of Baymont Inn Suites.
For a prospective franchisee, this means it is crucial to adhere strictly to Baymont Inn Suites's brand standards and operational guidelines to avoid any actions that could be interpreted as harmful to the brand's goodwill. Franchisees should also be aware that Baymont Inn Suites's judgment on what constitutes harm to the brand is a key factor in determining whether a breach has occurred. This underscores the importance of maintaining a positive relationship with the franchisor and seeking clarification on any potentially problematic actions.