What is the minimum liquidated damages amount for a Baymont Inn Suites franchise before the Ending Period?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Before the Ending Period, Liquidated Damages will not be less than the product of $2,000 multiplied by the number of guest rooms that you are authorized to operate under Schedule B of this Agreement as of the Termination.
In the event that we authorize you to reduce the number of rooms at the Facility after the Opening Date, then we reserve the right to charge Liquidated Damages for those rooms on a per-room basis, either at the time they are removed from the Facility's inventory or at Termination.
If the Facility has been open for fewer than 12 months, then the amount shall be the average monthly Recurring Fees since the Opening Date multiplied by 24.
You also will pay any applicable Taxes assessed on such payment and Interest calculated under Section 7.3 accruing from 10 days after the date of Termination.
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, if the franchise agreement is terminated before the Ending Period, the minimum liquidated damages will not be less than $2,000 multiplied by the number of guest rooms the franchisee is authorized to operate under Schedule B of the agreement as of the termination date. This means that the minimum amount owed is directly tied to the size of the hotel operation, with larger hotels incurring greater potential liabilities.
This liquidated damages clause is designed to compensate Baymont Inn Suites for the anticipated losses resulting from the early termination of the franchise agreement. It is important to note that this calculation serves as a baseline, and the actual damages could be higher if the standard calculation based on recurring fees yields a greater amount, especially if the facility has been open for fewer than 12 months. In that case, the liquidated damages would be the average monthly Recurring Fees since the Opening Date multiplied by 24.
It's also important to note that Baymont Inn Suites reserves the right to charge liquidated damages for rooms removed from the facility's inventory after the opening date, either at the time of removal or at termination. Additionally, the franchisee is responsible for any applicable taxes assessed on the liquidated damages payment, as well as interest accruing from 10 days after the termination date. Prospective franchisees should carefully consider the number of rooms they plan to operate and the potential financial implications of early termination, as these factors directly influence the minimum liquidated damages amount.