What is the Franchisee requesting from the Company in the Three-Party Agreement for a Baymont Inn Suites franchise?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned duly-authorized representative of Franchisee requests that Franchisor offer and issue a Three-Party Agreement ("TPA") in favor of the "Lender" named below for the purpose of inducing Lender to loan funds (the "Loan") to Franchisee secured by Franchisee's interest in the Facility. Franchisee understands and agrees to the following conditions that apply to the offer and issuance of the TPA. If Franchisee is not currently a party to a franchise agreement with Franchisor pertaining to the Facility, the offer and issuance of the TPA by Franchisor will be subject to the execution of such a franchise agreement (the franchise agreement, including all amendments and ancillary agreements, the "Franchise Agreement"); the payment of an initial fee or affiliation fee, as applicable; and Franchisor's receipt of such other documents Franchisor deems necessary to consummate the closing of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 96–97)
What This Means (2025 FDD)
According to the 2025 Baymont Inn Suites FDD, the franchisee is requesting that Baymont Franchise Systems, Inc. offer and issue a Three-Party Agreement (TPA) to the lender. This agreement is intended to encourage the lender to provide funds (the "Loan") to the franchisee, using the franchisee's interest in the facility as security. The franchisee acknowledges and agrees to specific conditions related to the TPA's offer and issuance.
If the franchisee isn't already in a franchise agreement with Baymont Inn Suites for the facility, the issuance of the TPA is contingent upon the execution of such a franchise agreement. This includes paying the initial fee or affiliation fee, if applicable. Additionally, Baymont Inn Suites must receive any other documents they deem necessary to finalize the franchise agreement.
In simpler terms, the franchisee needs the Three-Party Agreement from Baymont Inn Suites to secure financing from a lender, using the hotel facility as collateral. However, Baymont Inn Suites will only issue this agreement if the franchisee has a valid franchise agreement in place, has paid all required fees, and has provided all necessary documentation to Baymont Inn Suites.