Under what circumstances does the three-party agreement with Baymont Inn Suites automatically terminate?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- Termination of Agreement. This Agreement terminates automatically when (i) Company or Franchisee terminates the license or the PrimaryAgreementsin accordancewith their terms after giving Lender any notice required under this Agreement; (ii) Lender no longer has a security interest in the Facility or Lender's loan is paid in full; (iii) the term of the license under the Franchise Agreements expires; (iv) Lender assumes the Primary Agreements under the terms of this Agreement; or (v) Lender assigns its interest in the loan to a third party other than as expressly permitted by Section 9.1 of this Agreement. There is no equitable right of redemption applicable to this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 96–97)
What This Means (2025 FDD)
According to the 2025 FDD, the Three-Party Agreement involving Baymont Inn Suites, the franchisee, and the lender will automatically terminate under specific conditions. These conditions include the termination of the license or Primary Agreements by either Baymont Inn Suites or the franchisee, provided the lender receives any required notice. The agreement also ends if the lender no longer holds a security interest in the facility or if the lender's loan is fully paid.
Additionally, the Three-Party Agreement terminates automatically if the lender assumes the Primary Agreements according to the agreement's terms. Finally, the agreement is terminated if the lender assigns its interest in the loan to a third party, unless such assignment is expressly permitted by Section 9.1 of the agreement.
Prospective Baymont Inn Suites franchisees should understand these termination conditions, as they outline the circumstances under which the lender's involvement and the associated protections and obligations cease. This knowledge is crucial for managing the financial aspects of the franchise and understanding the relationship between the franchisee, franchisor, and lender.