Can Delta Hotels By Marriott or its affiliates develop other hotels near a franchisee's hotel?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
y.
- Waiver of Exemplary and Punitive Damages: Requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damages.
- General Release: Requiring North Dakota franchisees to execute a general release of claims as a condition of renewal or transfer of a franchise.
- Limitation of Claims: Requiring North Dakota franchisees to consent to a limitation of claims under the North Dakota Franchise Investment Law. The statute of limitations under the North Dakota Franchise Investment Law will apply to claims (if any) brought under the North Dakota Franchise Investment Law.
- Enforcement of Agreement: Requiring North Dakota franchisees to pay all costs and expenses incurred by the franchisor in enforcing the agreement. The prevailing party in any enforcement action is entitled to recover all costs and expenses including reasonable attorney's fees.
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- Any arbitration will be held at a site mutually agreeable to the franchisor and the franchisee.
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- Each provision of this Amendment to the disclosure document will be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the North Dakota Franchise Investment Law, N.D. Cent. Code, §§ 51-19-1 through 51-19-17, are met independently without reference to this Amendment to the disclosure document and to the extent it is then a valid requirement of the statute.
RHODE ISLAND
STATUTORY AND REGULATORY PROVISIONS AND REQUIREMENTS OF THE RHODE ISLAND FRANCHISE INVESTMENT ACT APPLICABLE TO THE FRANCHISE DISCLOSURE DOCUMENT
TERRITORY
Your franchise agreement will permit you to operate one hotel of a specific size at a specific site selected by you and approved by us. You will not receive the right to acquire additional franchises at any location. We and our affiliates have and retain the rights to, or license or franchise others to, develop, promote, market, own, operate, lease, license, franchise, and/or manage other hotels, lodging products or concepts, or other business operations (including Delta hotels, other Company Brand Businesses, and lodging products operating under the MVW Licensed Brands) at any location, including locations adjacent or proximate to your hotel. These business operations may compete directly with, and adversely financially impact the operation of, your hotel.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we or our affiliates own, lease, manage, license, or franchise, or from other channels of distribution or competitive brands that we or our affiliates control.
You may not be granted a territory, but if you are, it will be non-exclusive. Generally, a territory: (i) will apply to Delta hotels only (iii) will apply for a duration of five years or less; (iv) will not apply to any hotel that is existing or under development as of the date of the franchise agreement; (v) will not apply to any hotel or hotels that are members of a chain of hotels or a group of hotels (with a minimum of four hotels in operation) that is acquired by, merged with, franchised by, or joined through a marketing agreement with, us or one of our affiliates, or the operation of all or substantially all of such hotels is transferred to us or one of our affiliates, even if any such hotel converts to a Delta hotel;
Source: Item 12 — TERRITORY (FDD pages 102–103)
What This Means (2025 FDD)
According to the 2025 Delta Hotels By Marriott Franchise Disclosure Document, franchisees should be aware that neither an exclusive territory nor any rights to prevent competition from Delta Hotels By Marriott or its affiliates are guaranteed. Delta Hotels By Marriott retains the right to develop, operate, franchise, or license other hotels, lodging products, or business operations, including Delta Hotels By Marriott and other brands, at any location, even near a franchisee's hotel. This explicitly includes the possibility of these operations competing directly with a franchisee's Delta Hotels By Marriott location, which could negatively impact its financial performance.
Delta Hotels By Marriott's reservation, sales, and marketing personnel are not obligated to prioritize Delta Hotels By Marriott locations. They can market other Company Brand Businesses, MVW Licensed Brands lodging products, and any other lodging products affiliated with Delta Hotels By Marriott. These representatives may recommend lodging options other than Delta Hotels By Marriott based on customer preferences such as location, availability, service levels, amenities, and price. Furthermore, Delta Hotels By Marriott can establish other systems with similar services or products under different trademarks and operate company-owned, managed, or franchised businesses within a Delta Hotels By Marriott franchisee's general market area.
While franchisees do not receive an exclusive territory, Delta Hotels By Marriott does offer a process to address potential conflicts. Delta Hotels By Marriott may try to resolve conflicts between franchisees and the company, among franchisees, or regarding territories, customers, or franchisor support on a case-by-case basis, considering the contractual rights and obligations of all parties involved. Additionally, Delta Hotels By Marriott provides notice to Company Brand Hotel franchisees and owners of certain new development and conversion projects for Company Brand Hotels as set forth in their Growth Administration Guidelines, which are available upon request. These guidelines allow notified owners and franchisees to respond to the proposed project and, if certain conditions are met, request an independent impact study. However, these guidelines are subject to change or elimination, so franchisees should not rely on them as a guaranteed protection against competition.