Who are the three parties involved in the Three-Party Agreement for a Baymont Inn Suites franchise?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Three-Party Agreement (the "Agreement") is made and entered into as of, 20 by |
|---|
| and among |
| ("Lender"); |
| ("Franchisee"); and |
| ("Franchisor" or "Company"). |
| Lender, Franchisee, and Franchisor each are referred to as a "Party" and collectively are referred to as the |
| "Parties." |
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 involves three distinct entities. These are the Lender, who provides financing to the franchisee; the Franchisee, who is the individual or entity operating the Baymont Inn Suites location; and the Franchisor, which in this case is Baymont Franchise Systems, Inc. or "Company".
The Three-Party Agreement outlines the rights and responsibilities of each party, particularly concerning the loan provided by the Lender to the Franchisee. Baymont Inn Suites, as the Franchisor, consents to the Franchisee's pledge of the franchise agreement as collateral for the loan. This agreement ensures that the Lender has certain rights related to the franchise agreement in the event the Franchisee defaults on their loan obligations.
This arrangement is typical in franchise financing, as it provides security to the lender while allowing the franchisee to obtain necessary capital. The agreement clarifies the franchisor's role and consent in this financial arrangement. Prospective Baymont Inn Suites franchisees should carefully review the Three-Party Agreement to understand their obligations and the rights of the lender and franchisor.