What are the financial and operational covenants that Best Western is required to maintain related to the Denver 3560 Construction Loan?

According to Best Western's 2025 Franchise Disclosure Document, the company is required to maintain certain financial and operational covenants related to the Denver 3560 construction loan. As of November 30, 2024 and 2023, Best Western was in compliance with all covenants.

The Denver 3560 construction loan was established in March 2020 with UMB Bank, initially allowing for advances up to $21.6 million. It was modified in July 2021 to increase the availability of loan advances to $24.4 million. Interest on the outstanding principal balance was due monthly from May 1, 2020, through April 1, 2023. Starting April 1, 2023, principal and interest are due and payable in an amount determined by UMB to amortize the loan over a 25-year period, with the remaining principal balance due on the maturity date of March 11, 2027.

While the FDD mentions that Best Western must adhere to certain financial and operational covenants, it does not specify what these covenants are. A prospective franchisee should request a detailed explanation of these covenants from Best Western to fully understand the obligations and potential risks associated with the Denver 3560 construction loan.