What form must a Baymont Inn Suites franchisee sign to receive the Development Incentive?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
To receive the Development Incentive, you and your principals, as co-makers, must sign a Development Incentive Note, which will specify the amount of the incentive, in the form attached to Exhibit C-1 when you sign and deliver to us the Franchise Agreement. If you and/or your principals are residents of community property or certain other states, your and /or their spouses must also co-sign the Development Incentive Note. In addition, you must sign an addendum to the Franchise Agreement, agreeing to make all payments due under the Franchise Agreement and ancillary agreements through electronic funds transfers through the ACH (automated clearing house) system. You must provide us with a current balance sheet, loan documents and other information we request detailing the total cost of the Facility, the amount being financed, and your equity investment in the Facility. If we offer you a Development Incentive, you may not be eligible for any reduction in Initial or Recurring Fees (see Items 5, 6 and 15). The Development Incentive program may be modified, limited, extended, or terminated at any time without 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.
Source: Item 10 — FINANCING (FDD pages 59–61)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, to receive the Development Incentive, a franchisee and their principals must sign a Development Incentive Note. This note specifies the incentive amount and is in the form attached to Exhibit C-1 of the Franchise Agreement. If the franchisee or their principals reside in a community property state, their spouses must also co-sign the note. Additionally, the franchisee must sign an addendum to the Franchise Agreement, agreeing to make all payments via electronic funds transfers through the ACH system.
To ensure eligibility, the franchisee must provide Baymont Inn Suites with a current balance sheet, loan documents, and other requested information detailing the total cost of the facility, the amount being financed, and the franchisee's equity investment. The Development Incentive is disbursed after several conditions are met, including a final credit review, the official opening of the facility with Baymont Inn Suites's consent, completion of all required pre-opening improvements, payment of the Initial Fee, and being in good standing under the Franchise Agreement.
Baymont Inn Suites may offer the Development Incentive in cash or disbursed to a third party for constructing the hotel. If issued in cash, Baymont Inn Suites may require the franchisee to use an approved procurement service provider or purchase directly from a manufacturer or approved supplier. The fee for these procurement services typically ranges from 11% to 17% of the total cost of furniture, fixtures, and equipment. The Development Incentive is a loan that is forgiven over the term of the Franchise Agreement, with 1/20th of the original amount forgiven each year after the Facility's Opening Date. If the franchise terminates or is transferred before the end of the term, the franchisee must repay the outstanding balance.