What is the dependency between the transferee's capabilities and Delta Hotels By Marriott's right to assign the contract?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY1 | |
|---|---|---|---|
| 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. |
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, Delta Hotels By Marriott's right to assign the franchise agreement is tied to the transferee's capabilities. Delta Hotels By Marriott faces no restrictions on assigning the contract if the transferee meets specific criteria.
Delta Hotels By Marriott can freely assign the franchise agreement if the transferee is an affiliate or has acquired substantially all rights to the Delta Hotels By Marriott system. A key condition is that the transferee must agree to assume Delta Hotels By Marriott's obligations under the franchise agreement.
Furthermore, the transferee must demonstrate the capability to perform these obligations. This ensures that the new entity managing the franchise can maintain the standards and commitments outlined in the original agreement. This condition protects the franchisee by ensuring the new franchisor is equipped to support the Delta Hotels By Marriott system.
This arrangement is typical in franchising, as it allows the franchisor flexibility in restructuring or selling the brand while safeguarding franchisees' interests by ensuring the new franchisor is competent and committed to upholding the franchise agreement.