Is the System Assessment Fee for Baymont Inn Suites held in trust?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The System Assessment Fees are not held in trust and we do not manage the Fund in a fiduciary capacity, although its funds are separately accounted for on our books. We administer and apply the Fund at our discretion. We are not required to, nor do we, have the Fund audited. We do not provide reporting to you or other members about its finances. Any monies which remain in the Fund at the end of the year (or deficiencies where the amount spent for marketing exceeds the contributions collected for the year) are carried over into the following year. The Fund may be used to compensate us or an affiliate for any administrative or other services, such as reasonable expenses incurred for accounting, collection, data processing, computer services, bookkeeping, reporting, system maintenance, and legal services that we or the affiliate provide to the Fund to support marketing activities, the CRS, and for our out-of-pocket costs. In addition, we or an affiliate may provide products or services to the Fund. We may earn a profit on these activities, products, and services. However, they will be provided at a cost comparable to the cost that the Fund would otherwise incur if the products or services were obtained from unaffiliated third parties. In 2024, Fund expenditures were used as follows: 20.5% for media placement (including electronic marketing); 0.7% for production; 22.2% for administration; and 56.6% for other expenses (e.g., public relations, guest services, group and corporate sales, field services, and training). In 2024, no portion of the Fund was utilized principally to solicit the sale of new franchises.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 61–74)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, the System Assessment Fees are not held in trust. These fees, which are collected from franchisees, are deposited into a marketing fund but Baymont Inn Suites does not manage this fund in a fiduciary capacity.
Baymont Inn Suites has discretion over how the funds are administered and applied. The funds are separately accounted for on their books, but Baymont Inn Suites is not required to have the fund audited, nor do they provide financial reports to franchisees. Any remaining monies or deficiencies in the fund at the end of the year are carried over into the following year.
The fund may be used to compensate Baymont Inn Suites or its affiliates for administrative or other services, such as accounting, data processing, and legal services, and they may earn a profit on products or services provided to the fund, as long as the cost is comparable to what unaffiliated third parties would charge. In 2024, the fund expenditures were allocated as follows: 20.5% for media placement (including electronic marketing), 0.7% for production, 22.2% for administration, and 56.6% for other expenses such as public relations, guest services, and training. No portion of the fund was used to solicit the sale of new franchises in 2024.