Does Baymont Inn Suites require security for the Initial Fee Note?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
We may defer payment of the Initial Fee, if business circumstances warrant, in our sole discretion. The deferral is usually for a short term such as 90 days, or until the Facility opens as a Chain Facility, whichever occurs first. If deferred, you must pay the Initial Fee in one or more installments without the accrual of interest unless you do not pay the Initial Fee within ten days after it is due. The number of payments may vary based on business circumstances, but generally requires up to three equal installments over a 90-day period. We do not require any security for the Initial Fee Note. The Initial Fee Note may be prepaid at any time without penalty. You and your owners must sign the Initial Fee Note in substantially the form shown in Exhibit C-1. If your owners are residents of community property or certain other states, their spouses must also co-sign the Initial Fee Note. Under the Initial Fee Note, you and your guarantors, or any co-makers of the Initial Fee Note, waive traditional defenses. These defenses include presentment, demand, notice of demand, protest, notice of non-payment, notice of protest, notice of dishonor and diligence in collection. We reserve the right to modify the terms of the Initial Fee Note and/or grant extensions, novations, releases or compromises to you or any co-maker without the consent of, or affecting the liability of, any other party to the
Source: Item 10 — FINANCING (FDD pages 59–61)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, Baymont Inn Suites does not typically require security for the Initial Fee Note. However, if the Initial Fee is not paid within 10 days after it is due, it will bear simple interest at a rate of the lesser of 18% per annum (1.5% per month) or the highest rate allowed by law. Defaulting on the Initial Fee Note also constitutes a default under the Franchise Agreement.
Baymont Inn Suites may defer payment of the Initial Fee at their discretion, usually for a short term like 90 days or until the facility opens as a Chain Facility, whichever comes first. If deferred, the Initial Fee must be paid in one or more installments without interest accrual, unless payment is not made within ten days of the due date. The number of payments may vary but generally requires up to three equal installments over a 90-day period. Franchisees and their owners must sign the Initial Fee Note, and if they reside in community property or certain other states, their spouses must also co-sign.
Under the Initial Fee Note, franchisees and guarantors waive traditional defenses such as presentment, demand, notice of demand, protest, notice of non-payment, notice of protest, notice of dishonor, and diligence in collection. Baymont Inn Suites reserves the right to modify the terms of the Initial Fee Note or grant extensions without affecting the liability of any other party. The Initial Fee Note is not subject to setoff, offset, or recoupment. If the Franchise Agreement terminates or the facility is transferred, Baymont Inn Suites may demand immediate payment of the Initial Fee Note in full.
If Baymont Inn Suites has to collect the Initial Fee Note through an attorney, the franchisee will be responsible for reasonable attorney's fees and all costs of collection. This is a fairly standard practice in franchising, as it protects the franchisor's financial interests in case of franchisee default. Prospective franchisees should be aware of these conditions and ensure they have sufficient capital to meet their obligations under the Initial Fee Note.