What are the 'Primary Agreements' related to a Baymont Inn Suites franchise, as defined in the Three-Party Agreement?
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 Primary Agreements are defined within the context of a Three-Party Agreement involving the franchisee, franchisor, and a lender. The Franchise Agreement, along with any ancillary agreements related to it, are collectively referred to as the "Primary Agreements." These agreements govern the franchisee's operation of a guest lodging facility as a Baymont Inn Suites franchised location.
This definition is crucial when a franchisee seeks financing to establish or operate their Baymont Inn Suites location. Lenders often require a security interest in the Franchise Agreement as collateral for the loan. The Three-Party Agreement essentially formalizes the relationship between the lender, Baymont Inn Suites, and the franchisee, outlining the rights and responsibilities of each party in relation to the Franchise Agreement.
For a prospective Baymont Inn Suites franchisee, understanding the scope of the Primary Agreements is essential. It clarifies which documents are subject to the lender's security interest and ensures that all parties are aligned on the terms of the franchise and the financing. This also affects the Guaranty, where the guarantor is warranting the representations and obligations within these Primary Agreements. Any obligations of the franchisee under the Primary Agreements must be punctually paid and performed from the time the assignee becomes the franchisee under the Franchise Agreement.
Furthermore, Baymont Inn Suites retains certain rights and control even with a Three-Party Agreement in place. The franchisor's consent is required for the collateral assignment of the Franchise Agreement to the lender, and the franchisor may issue a replacement three-party agreement under certain conditions, such as when the lender appoints a third-party servicing agent or transfers the loan to a successor mortgagee. This ensures that Baymont Inn Suites maintains oversight of its brand standards and franchise operations, even when a franchisee has secured external financing.