What is a 'Protected Territory' for a Baymont Inn Suites franchise as defined in the Franchise Agreement?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be assigned a "Protected Territory" under Section 2 of the Franchise Agreement in which we will not own, operate or manage another Chain Facility without your consent. We will not permit any additional franchises for a Chain Facility to open in the Protected Territory after you execute your Franchise Agreement with us. Any Chain Facility located within the Protected Territory when your Franchise Agreement becomes effective may have its franchise renewed or reissued, expanded for additional guest rooms or, if its franchise terminates or is not renewed, replaced with a replacement Chain Facility having not more than 120% of the guest rooms of the replaced Chain Facility, located within the same trading area.
We will negotiate the Protected Territory with you before you sign the Franchise Agreement. These negotiations will take into account one or more of the following: the nature of the market your Facility will serve (urban/suburban/rural); population density; demographics; natural travel boundaries (such as rivers or impassable lands); what public and private facilities, if any, will generate lodging demand for your Facility (including airports, highways, sports, recreation and entertainment venues, colleges, military bases, tourist attractions, hospitals, shopping malls and commercial and industrial activities); the "seasonal" versus year round nature of anticipated occupancy of your Facility; the weekend versus weekday anticipated occupancy of your Facility; and other variables. The Protected Territory may be defined as a radius from the door of the Facility or an irregular area bound by one or more highways, streets, governmental jurisdiction boundaries or natural boundaries, or by latitude and longitude and described in words, depicted on a map or both. In any case, your Protected Territory will be described in Section 2 of the Franchise Agreement. There is no minimum Protected Territory that we offer.
We may own, operate, lease, manage or license Chain Facilities anywhere outside of the Protected Territory without restriction or obligation, even if they compete with your Facility. We may grant Protected Territories for other Chain Facilities that overlap your Protected Territory.
Continuation of your territorial rights does not depend upon whether you achieve certain sales volumes, market penetration or other contingencies. We may operate, lease, manage, or license any other party to operate a Chain Facility in the Protected Territory beginning (a) six months before the expiration of the Franchise Agreement, or (b) as of the date that a date for the premature termination of the Franchise Agreement has been confirmed in writing by us. During the term of your Franchise Agreement, neither you nor your owners, officers or directors may own, lease, manage or franchise a timeshare resort, vacation or residence club, fractional ownership residence, condominium/apartment leasing or rental business, or the like, for any facility or business that shares directly or indirectly, any common areas, amenities, recreation facilities, services, supplies or support activities with the Facility. You are also prohibited from promoting a different or competing business, including advertising hotels other than Chain Facilities or those of the Lodging Affiliates, and advertising any timeshare or vacation ownership resort not affiliated with us or our current and former affiliates. If you breach this obligation, we may terminate your Protected Territory.
Source: Item 12 — TERRITORY (FDD pages 74–76)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, a franchisee will be assigned a "Protected Territory" as outlined in Section 2 of the Franchise Agreement. Within this territory, Baymont Inn Suites will not own, operate, or manage another Chain Facility without the franchisee's consent, nor will they permit additional franchises for a Chain Facility to open after the Franchise Agreement is executed. However, any Chain Facility already located within the Protected Territory when the agreement takes effect may have its franchise renewed or reissued, expanded for additional guest rooms, or replaced with a new Chain Facility, provided the replacement does not exceed 120% of the original facility's guest rooms and remains in the same trading area.
The specifics of the Protected Territory are negotiated with the franchisee before signing the Franchise Agreement, considering factors such as the market type (urban, suburban, or rural), population density, demographics, natural travel boundaries, and the presence of public and private facilities that generate lodging demand. These facilities can include airports, highways, sports venues, colleges, military bases, tourist attractions, hospitals, shopping malls, and commercial activities. The seasonal nature of occupancy and the weekday versus weekend occupancy rates are also taken into account. The Protected Territory can be defined as a radius from the facility or an irregular area bounded by highways, streets, governmental boundaries, natural boundaries, or by latitude and longitude, and it will be described in Section 2 of the Franchise Agreement.
Baymont Inn Suites may operate Chain Facilities outside the Protected Territory without any restrictions, even if they compete with the franchisee's facility. Overlapping Protected Territories for other Chain Facilities are also possible. The continuation of territorial rights is not dependent on achieving specific sales volumes or market penetration. However, Baymont Inn Suites may operate a Chain Facility in the Protected Territory starting six months before the Franchise Agreement's expiration or from the date a premature termination date is confirmed in writing. The franchisee is restricted from owning or operating certain types of businesses, such as timeshare resorts or vacation clubs, that share common amenities with the Baymont Inn Suites facility, and from promoting competing businesses. Breaching this obligation may result in the termination of the Protected Territory. There is no minimum Protected Territory that Baymont Inn Suites offers.