How is interest calculated on Advances for Delta Hotels By Marriott franchisees?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
Advance is repaid by Obligors in full. Interest shall be calculated based on a year of 365 days, and the actual number of days elapsed.
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, interest on Advances is calculated based on a 365-day year, using the actual number of days elapsed until the Advance is repaid in full. This method, known as the actual/365 day count convention, is a common way to calculate interest.
For a prospective Delta Hotels By Marriott franchisee, this means that the interest accrued on any Advance will be determined by the exact number of days the principal amount remains outstanding. The daily interest rate is derived by dividing the annual interest rate by 365, and this daily rate is then applied to the outstanding principal for each day of the period.
This calculation method ensures that interest accrues precisely according to the time the funds are in use. Franchisees should be aware of this calculation method to accurately forecast and manage their repayment obligations related to any Advances they receive.