Under what conditions will a Baymont Inn Suites franchisee be required to pay liquidated damages?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
You will pay us Liquidated Damages equal to the average daily Royalties and System Assessment Fees for the one-year period preceding the date of your condemnation notice to us multiplied by 365 less the number of days in the Notice Period.
This payment will be made within 30 days after Condemnation is completed (when you close the Facility or you deliver it to the condemning authority).
You will pay no Liquidated Damages if the Condemnation is completed after the Notice Period expires.
For the sake of clarity, you must continue to pay when due the
fees, set forth in this Agreement, including under Section 7, and all other agreements with us or our affiliates pertaining to the Facility until Condemnation is completed.
If you do not strictly comply with all of the de-identification requirements above, in the System Standards Manual and in our other brand directives, you agree to pay us a royalty equal to $2,000 per day until deidentification is completed to our satisfaction.
If the Facility has been open for fewer than 12 months, then the amount shall be the average monthly Recurring Fees since the Opening Date multiplied by 24.
Before the Ending Period, Liquidated Damages will not be less than the product of $2,000 multiplied by the number of guest rooms that you are authorized to operate under Schedule B of this Agreement as of the Termination.
If we terminate this Agreement under Schedule D before the Opening Date, then you will pay us, within 10 days after you receive our notice of Termination, Liquidated Damages in an amount equal to $1,000 per guest room described on Schedule B.
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, franchisees may be subject to liquidated damages under various circumstances, primarily related to termination, transfer, or condemnation of the franchise agreement.
If Baymont Inn Suites does not approve a transfer of the franchise, they may allow the franchisee to terminate the franchise when they sell the facility, but the franchisee must pay liquidated damages as outlined in Section 12.1 of the agreement. Additionally, if a franchisee terminates the agreement due to a casualty (such as a fire) but the facility will still be used as a transient guest lodging facility within two years, they may be obligated to pay liquidated damages.
In the event of condemnation of the Baymont Inn Suites property, the franchisee is obligated to provide notice to the franchisor and pay fees as outlined in Section 7 for one year after the initial notice, or until the condemnation occurs, whichever is longer. The franchisee will also pay liquidated damages equal to the average daily Royalties and System Assessment Fees for the one-year period preceding the date of the condemnation notice, multiplied by 365, less the number of days in the Notice Period. Furthermore, if the franchisee fails to comply with de-identification requirements after termination, they agree to pay a royalty of $2,000 per day until de-identification is completed to Baymont Inn Suites's satisfaction.
If Baymont Inn Suites terminates the agreement under Schedule D before the opening date, the franchisee will pay liquidated damages equal to $1,000 per guest room described on Schedule B, payable within 10 days after receiving the termination notice. The amount of liquidated damages may also be determined based on the average monthly Recurring Fees since the Opening Date multiplied by 24 if the Facility has been open for fewer than 12 months. Before the Ending Period, liquidated damages will not be less than the product of $2,000 multiplied by the number of guest rooms that the franchisee is authorized to operate under Schedule B of the Agreement as of the Termination.