What is the 'Facility' referenced in the Three-Party Agreement for a Baymont Inn Suites franchise?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| The Franchise Agreement. Franchisee and Franchisor entered into that certain franchise, | license or membership agreement, dated, 20 | (the "Franchise Agreement"), related to a | guest lodging facility located at, designated as Unit # | (the "Facility"). The Franchise | Agreement and certain ancillary agreements related to the Franchise Agreement collectively are referred to | as the "Primary Agreements." Pursuant to the Primary Agreements, Franchisee operates the Facility as a | ® franchised location. Capitalized terms used and not defined in this Agreement shall have the | meanings given to them in the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 96–97)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, the "Facility" in the context of the Three-Party Agreement refers to the guest lodging facility that is the subject of the franchise agreement. The Three-Party Agreement involves the lender, franchisee, and franchisor, where the lender provides funds to the franchisee, using the franchise agreement as collateral. The Baymont Inn Suites franchise agreement pertains to a specific guest lodging facility. This facility is the location where the franchisee operates a Baymont Inn Suites franchised location under the terms of the Primary Agreements. The legal description of the facility is detailed in Schedule A of the franchise agreement.
For a prospective Baymont Inn Suites franchisee, understanding the definition of "Facility" is crucial because it identifies the physical location and property to which the franchise agreement and related financial arrangements apply. The franchisee's rights and obligations under the franchise agreement are tied to this specific location. Any changes to the facility, such as transfers or significant alterations, could have implications under the agreement, potentially requiring franchisor and lender consent.
The Three-Party Agreement is contingent upon the franchisee's interest in the Facility, meaning that the lender's security interest is directly linked to the property's operation as a Baymont Inn Suites franchise. If the franchisee is not already party to a franchise agreement pertaining to the Facility, the offer and issuance of the Three-Party Agreement by Baymont Inn Suites is subject to the execution of a franchise agreement, payment of the initial fee, and receipt of other necessary documents to close the Franchise Agreement.