How are liquidated damages calculated in the event of a Condemnation for a Baymont Inn Suites franchise?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event a Condemnation is to occur, you will pay us the fees set forth in Section 7 for a period of one year after we receive the initial notice of condemnation described in Section 11.3.2, or until the Condemnation occurs, whichever is longer (the "Notice Period").
You will pay us Liquidated Damages equal to the average daily Royalties and System Assessment Fees for the one-year period preceding the date of your condemnation notice to us multiplied by 365 less the number of days in the Notice Period.
This payment will be made within 30 days after Condemnation is completed (when you close the Facility or you deliver it to the condemning authority).
You will pay no Liquidated Damages if the Condemnation is completed after the Notice Period expires.
For the sake of clarity, you must continue to pay when due the
fees, set forth in this Agreement, including under Section 7, and all other agreements with us or our affiliates pertaining to the Facility until Condemnation is completed.
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, in the event of a condemnation, the franchisee is obligated to pay certain fees. Specifically, the franchisee must continue to pay the fees outlined in Section 7 of the agreement for one year after Baymont Inn Suites receives the initial notice of condemnation, as described in Section 11.3.2, or until the condemnation occurs, whichever period is longer. This duration is referred to as the "Notice Period."
In addition to the continued fees during the Notice Period, the franchisee will also be required to pay liquidated damages. These damages are calculated by taking the average daily Royalties and System Assessment Fees from the one-year period preceding the date the franchisee provides Baymont Inn Suites with the condemnation notice. This average daily amount is then multiplied by 365, and from that product, the number of days in the Notice Period is subtracted. This final figure represents the liquidated damages owed by the franchisee.
The payment of these liquidated damages must be made within 30 days after the condemnation is completed, which is defined as either when the facility closes or when it is handed over to the condemning authority. However, the franchisee will not be liable for any liquidated damages if the condemnation is completed after the Notice Period has expired. It is important to note that until the condemnation is completed, the franchisee is obligated to continue paying all fees as stipulated in the franchise agreement and any other agreements with Baymont Inn Suites or its affiliates pertaining to the facility.