What happens if an event of default exists for Delta Hotels By Marriott?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
l at least ninety (90) days in advance of the expiration of the then-current term.
- b. In the event that Franchisee is in default under this Agreement, Marriott may terminate this Agreement by giving thirty (30) days' written notice to Franchisee.
- c. Subject to Section 7.d, Franchisee may terminate this Agreement by giving ninety (90) days' written notice to Marriott.
- d. This Agreement will immediately terminate upon termination of the Franchise Agreement; except in the event that Marriott consents to or approves the transaction (including a sale of the Hotel or other transfer requiring the consent of Marriott) pursuant to which the Franchise Agreement is terminated, in which case this Agreement may be assigned as set forth in any such consent or approval.
- e. Franchisee acknowledges that Marriott may be damaged in several ways upon termination of this Agreement pursuant to Paragraph 7.b or Paragraph 7.c (an "Event Termination"). Franchisee acknowledges that certain costs and expenses related to the Hotel's participation in the Programs, as allocated to Franchisee pursuant to Paragraph 3 and Attachment A (including all of those costs allocated pursuant to Exhibits attached thereto), have already been incurred by Marriott or accrued by Franchisee prior to the date of the Event Termination ("Prior Costs"). Furthermore, certain costs and expenses related to the Hotel's participation in the Programs, as allocated or allocable to Franchisee pursuant to Paragraph 3 and Attachment A and the Exhibits thereto, to be incurred by Marriott or accrued by Franchisee, after the Event Termination ("Future Costs") may not be recoverable. In the event of an Event Termination, Marriott shall be entitled to recover from Franchisee, and Franchisee shall be obligated to promptly pay to Marriott, no later than the date of termination of this Agreement, the Prior Costs and Future Costs, as reasonably determined by Marriott.
Source: Item 6 — Obligations of Franchisee.** Franchisee agrees to the following: (FDD pages 363–513)
What This Means (2025 FDD)
According to the 2025 Delta Hotels By Marriott Franchise Disclosure Document, if a franchisee is in default under the agreement, Marriott may terminate the agreement by providing thirty days' written notice to the franchisee. Marriott may experience damages if the agreement is terminated due to franchisee default.
Delta Hotels By Marriott is entitled to recover from the franchisee, and the franchisee is obligated to promptly pay Marriott, no later than the date of termination of the agreement, the prior costs and future costs, as reasonably determined by Marriott. These costs and expenses relate to the hotel's participation in the Programs, as allocated to the franchisee. Prior Costs are those already incurred by Marriott or accrued by the franchisee before the termination date. Future Costs are those to be incurred by Marriott or accrued by the franchisee after the termination date, which may not be recoverable.
The agreement specifies that the payment of prior costs and future costs is not a penalty but a reasonable estimate of fair compensation for the damages Marriott would suffer due to the termination. Future Costs may include costs anticipated to be allocated to the hotel for the remainder of the initial term or renewal term, based on Marriott's most recent projection of such costs. The franchisee's obligation to pay these prior costs and future costs will continue even after the termination of the agreement.