What is a 'Lender Entity' in the context of acquiring a Delta Hotels By Marriott hotel?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
Lender may designate a wholly owned subsidiary of Lender (a "Lender Entity") to acquire the Hotel and enter into the franchise agreement referred to in Paragraph 2.A., in which case the requirements of this Paragraph 2 shall apply to such Lender Entity.
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, a 'Lender Entity' refers to a wholly-owned subsidiary designated by a lender to acquire a Delta Hotels By Marriott hotel. This situation typically arises when a lender has acquired ownership, control, or possession of the hotel through foreclosure or similar means, and the lender wishes to have a subsidiary entity take over the franchise agreement.
If a lender chooses to designate a Lender Entity, the requirements outlined in Paragraph 2 of the franchise agreement will apply to that Lender Entity. This means the Lender Entity must meet certain qualifications and obligations to maintain the franchise agreement with Delta Hotels By Marriott. These obligations could include demonstrating that the entity and its affiliates are not competitors or restricted persons, satisfying the franchisor's owner qualifications, and providing a guaranty acceptable to the franchisor.
This provision allows flexibility for lenders who acquire a Delta Hotels By Marriott property and want to ensure continued operation under the Delta Hotels By Marriott brand. By using a wholly-owned subsidiary, the lender can manage the hotel's franchise obligations through a separate entity specifically designed for that purpose, while still adhering to the standards and requirements set by Delta Hotels By Marriott.