What documents are included in the 'MICC Loan Documents' for a Delta Hotels By Marriott franchise?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
edit Enhancement to Lender, the following documents shall be delivered to MICC in form acceptable to MICC: (i) Reimbursement Agreement executed by Borrower and [Members / Partners]; (ii) Equity Pledge executed by the [Members / Partners]; (iii) UCC Financing Statements; (iv) Guaranty Agreement (limited to non-recourse carveout acts identified in the Guaranty Agreement)
- 10. Due on Sale / Due on Encumbrance: The MICC Documents contain due on sale and due on encumbrance clauses that prohibit the sale or encumbrance of the Project or any of the [Member / Partner] interests in Borrower without the prior written consent of MICC, which consent may be granted or withheld in MICC's sole discretion. The foregoing provisions of this paragraph notwithstanding, the Project may be encumbered by the Mortgage in favor of Lender.
- 11. Financial Statements: Borrower shall furnish to MICC quarterly and annual financial statements of Borrower and the [Members / Partners], annual income statements for the Project, and such other financial or operating information as MICC may from time to time reasonably require.
- 12. Default Provisions: In addition to MICC's customary provisions concerning defaults, each of the following shall constitute a default under the MICC Documents:
- (a) the failure to obtain MICC's approval in connection with any sale, transfer or encumbrance of the Project or any of the [Member / Partner] interests in Borrower;
- (b) the occurrence of a default under, or a termination of, the Marriott Franchise Agreement; and
- (c) the occurrence of a default beyond any applicable grace period in the performance of any of its obligations under the Mortgage, or any lien, encumbrance, security agreement or ground lease affecting the Project.
- 13. Guaranty Fee: In consideration for MICC's providing the Credit Enhancement, Borrower shall pay to MICC a [monthly / one-time upfront] fee in the amount of ___________ [percent ( ____ %) of the Loan balance].
Source: Item 6 — Obligations of Franchisee.** Franchisee agrees to the following: (FDD pages 363–513)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the MICC Loan Documents for a Delta Hotels By Marriott franchise include provisions regarding financial statements, default conditions, guaranty fees, and legal fees and expenses.
Specifically, franchisees must furnish MICC with quarterly and annual financial statements of the borrower and its members or partners, along with annual income statements for the project and any other financial or operating information reasonably required by MICC.
The MICC documents outline default provisions, including failure to obtain MICC's approval for any sale, transfer, or encumbrance of the project or member/partner interests, default or termination of the Marriott Franchise Agreement, and failure to meet obligations under the mortgage, lien, security agreement, or ground lease.
In return for MICC's credit enhancement, the borrower must pay MICC a monthly or one-time upfront fee, calculated as a percentage of the loan balance. Additionally, the borrower and its members/partners acknowledge MICC's right to reimbursement for fees, costs, and expenses related to the transaction, regardless of whether the loan and credit enhancement are finalized.