Under what circumstances might Baymont Inn Suites make exceptions to the obligation to provide a guaranty?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.3 Conditions. We may condition and withhold our consent to a Transfer when required under this Section 9 until the transferee and you meet certain conditions; however, we will not unreasonably withhold, delay or condition our consent to a Transfer if the Facility is then financed under a program in which the United States Small Business Administration ("SBA") guarantees the financing or its repayment.
If a Transfer is to occur, the transferee (or you, if an Equity Transfer is involved) must first complete and submit our application; qualify to be a franchisee in our sole discretion, given the circumstances of the proposed Transfer; provide the same supporting documents as a new franchise applicant; pay the Application Fee and Relicense Fee then in effect; sign the form of Franchise Agreement we then offer in conversion transactions; and agree to renovate the Facility as if it were an existing facility converting to the System, as we reasonably determine.
We will provide a required PIP after we receive the transferee's Application.
We may require structural changes to the Facility if it no longer meets System Standards for entering conversion facilities, or, in the alternative, condition our approval of the Transfer on limiting the transferee's term to the balance of your Term, or adding a right to terminate without cause exercisable by either party after a period of time has elapsed.
Our consent to the transaction will not be effective until these conditions are satisfied.
If we do not approve the Transfer, we may, in our sole discretion, allow you to terminate the Franchise when you sell the Facility and pay us Liquidated Damages under Section 12.1.
Such payment would be due and payable when you transfer possession of the Facility.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Baymont Inn Suites Franchise Disclosure Document, Baymont Inn Suites may not unreasonably withhold, delay, or condition consent to a transfer if the facility is financed under a program in which the United States Small Business Administration (SBA) guarantees the financing or its repayment. This suggests that if a franchisee secures financing backed by the SBA, Baymont Inn Suites might be more flexible in its transfer requirements.
However, even with SBA-backed financing, certain conditions must still be met for a transfer to occur. The transferee (or the franchisee, in case of an equity transfer) needs to complete and submit an application, meet Baymont Inn Suites's qualifications to become a franchisee, provide all necessary supporting documents like a new applicant, pay the application and relicensing fees, sign the current franchise agreement for conversion transactions, and agree to renovate the facility according to Baymont Inn Suites's standards for existing facilities converting to the system. Baymont Inn Suites will provide a required Property Improvement Plan (PIP) after receiving the transferee's application.
Baymont Inn Suites retains the right to require structural changes to the facility if it doesn't meet the system standards for conversion facilities. Alternatively, Baymont Inn Suites can approve the transfer but limit the transferee's term to the remaining balance of the original term or add a clause allowing either party to terminate the agreement after a certain period. The transfer is not effective until all these conditions are satisfied. If Baymont Inn Suites does not approve the transfer, it may allow the franchisee to terminate the franchise upon the sale of the facility, provided the franchisee pays liquidated damages as per Section 12.1 of the agreement, payable when possession of the facility is transferred.