Is the payment for outside counsel costs refundable for Delta Hotels By Marriott, and when is it payable?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Outside Counsel Costs. If you are submitting an application for an existing Delta hotel or converting a hotel that is currently managed by us or one of our affiliates to a franchised Delta hotel, we will engage outside counsel in connection with the transaction, and you will be required to pay our outside counsel costs directly to our outside counsel prior to closing. If your hotel project is approved with a residential, condominium, or multi-family component, we will engage outside counsel in connection with the transaction, and you will be required to pay our outside counsel costs directly to our outside counsel prior to closing. These costs are payable and non-refundable, regardless of whether the transaction closes.
Source: Item 4 — BANKRUPTCY (FDD pages 34–39)
What This Means (2025 FDD)
According to the 2025 Delta Hotels By Marriott Franchise Disclosure Document, franchisees may be required to pay for outside counsel costs. If a prospective franchisee is submitting an application for an existing Delta Hotels By Marriott or converting a hotel currently managed by Delta Hotels By Marriott or its affiliates to a franchised Delta Hotels By Marriott, Delta Hotels By Marriott will engage outside counsel. If the hotel project is approved with a residential, condominium, or multi-family component, Delta Hotels By Marriott will also engage outside counsel.
These outside counsel costs are payable directly to Delta Hotels By Marriott's outside counsel prior to closing the transaction. It is important to note that these costs are non-refundable, regardless of whether the transaction is successfully completed and closed.
This means that a prospective Delta Hotels By Marriott franchisee needs to be prepared to pay these legal costs upfront and should factor them into their initial investment calculations. The non-refundable nature of the fee means that even if the deal falls through due to unforeseen circumstances, the franchisee will not be able to recover these expenses.