What is the purpose of the loan mentioned in the Three-Party Agreement for a Baymont Inn Suites franchise?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
es listed below are included for the convenience of the Parties only and not for the provision of notice under this Agreement.
| To Company: |
|---|
| 22 Sylvan Way |
| Parsippany, New Jersey 07054 |
| Attention: Vice President, Contract Compliance |
| Email Address: |
| Suzanne.Fenimore@Wyndham.com |
| To Lender: |
| Address |
| Attention: |
| Fax Number: |
| Email Address: |
| To Franchisee: |
| Address |
| Attention: |
| Fax Number: |
| Email Address: |
Each of the undersigned, intending to be legally bound hereby, has executed this Agreement as of the date first written above.
COMPANY: LENDER:
REQUEST FOR THREE-PARTY AGREEMENT
| ("Franchisor") | ||
|---|---|---|
| RE: | Current or Proposed | |
| Brand | ||
| Unit | ||
| No.: ("Facility") | ||
| Located or to Be Located at | Name:("Franchisee") | |
| Current or Proposed Franchisee/Member | ||
| DATE:, 20 |
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.
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- Franchisee agrees to and submits herewith a non-refundable fee in the amount of $1,000 ("TPA Fee"), which must be paid to Franchisor prior to, and in partial consideration for, Franchisor's review of the request for a TPA. The TPA Fee is non-refundable even if Franchisor and Lender do not enter into a TPA.
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- Franchisee authorizes Franchisor to release (and consents to the transmittal of) any and all information about Franchisee's account with Company, the status of the Franchise Agreement and the franchise relationship, the results of any quality assurance inspections, and guest complaints to Lender and its counsel (but Franchisor is under no obligation to do so). Franchisor may provide a copy of the Franchise Agreement to Lender, but is not required to do so, and Franchisee solely is responsible for ensuring that Lender has a full and complete copy of the Franchise Agreement if Lender requests the same. Franchisee represents and warrants to Franchisor that Franchisee has disclosed to Lender the current status of the Franchise Agreement and Franchisee's performance under the same and that Franchisee will advise Lender of any changes in that status through the time of closing of the Loan.
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- Franchisee requests that upon receipt of this request form executed by Franchisee and its guarantor or guarantors, Franchisor prepare and offer to Lender its standard form of TPA, which
will require Lender or an affiliate to assume the Franchise Agreement for the Facility and cure Franchisee's defaults if Lender or an affiliate takes possession of the Facility.
Source: Item 22 — CONTRACTS (FDD pages 96–97)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, the Three-Party Agreement (TPA) is used when a lender provides funds to a franchisee. The purpose of the loan is to provide capital to the franchisee, secured by the franchisee's interest in the Baymont Inn Suites facility. The lender desires certain rights related to the franchise agreement as collateral for the loan. Baymont Inn Suites consents to the security interest in the Franchise Agreement and grants rights to the lender, subject to the terms outlined in the Three-Party Agreement.
Baymont Inn Suites, the franchisee, and the lender are all parties to the Three-Party Agreement. Baymont Inn Suites acknowledges that the franchise agreement is active and that there are no outstanding default notices. The franchisee requests that Baymont Inn Suites issue the Three-Party Agreement to induce the lender to provide the loan. The issuance of the TPA is subject to the execution of the franchise agreement, payment of the initial fee, and receipt of other necessary documents.
This agreement allows the franchisee to obtain financing for their Baymont Inn Suites location while providing the lender with security in the form of the franchise agreement. Baymont Inn Suites maintains certain controls and conditions over the arrangement, ensuring compliance with the franchise agreement. This type of agreement is common in franchising, as it facilitates financing for franchisees while protecting the franchisor's interests and brand standards.