How does Delta Hotels By Marriott define a 'transfer' by the franchisee?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY1 | |
|---|---|---|---|
| i. | Franchisee's obligations on termination/non-renewal | Sections 19.4 and 20 | Obligations include complete de identification of hotel; delivery to us of any intellectual property and other materials relating to the operation of the hotel under the System, including all customer information, operating instructions, software and accompanying documentation and other materials provided by us; advising customers of the removal of the hotel from the System in accordance with the standards; compliance with the provisions of the franchise agreement that survive termination; and payment of all amounts due (including liquidated damages and actual damages if termination was due to your default as well as any fees associated with removing the hotel from the System). |
| j. | Assignment of contract by franchisor | Section 17.7 | No restriction on our right to assign if transferee is an affiliate of ours or has acquired substantially all of our rights to the System and agrees to assume our obligations to you under the franchise agreement and is capable of performing those obligations. |
| k. | "Transfer" by franchisee-defined | Section 17.1 and Exhibit B | Includes transfer of the franchise agreement or the hotel or a transfer of any ownership interest in you or in any entity that controls you.5 |
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 111–120)
What This Means (2025 FDD)
According to Delta Hotels By Marriott's 2025 Franchise Disclosure Document, a 'transfer' by the franchisee is comprehensively defined. The definition includes not only the transfer of the franchise agreement itself or the hotel property but also extends to any transfer of ownership interest in the franchisee or any entity that controls the franchisee. This broad definition ensures that Delta Hotels By Marriott maintains control over who operates and owns its franchises.
This definition has significant implications for prospective franchisees. It means that any change in ownership, even a partial one, is subject to the transfer provisions outlined in the franchise agreement. Delta Hotels By Marriott needs to approve most transfers. This requirement allows Delta Hotels By Marriott to vet potential new owners and ensure they meet the brand's standards and qualifications.
Delta Hotels By Marriott's right to approve transfers is a common practice in franchising. It protects the brand's reputation and consistency by ensuring that all franchisees meet certain criteria. However, it also means that franchisees need to carefully consider the implications of any potential ownership changes, as they will need to obtain Delta Hotels By Marriott's consent. Franchisees should familiarize themselves with the specific conditions and requirements for transfer approval to avoid any unexpected obstacles when planning for succession or exit strategies.