What is the 'Senior Loan' used for in connection with a Delta Hotels By Marriott franchise?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
As of the date hereof, Company is entering into a mortgage loan with Bank ("Senior Lender"), pursuant to which Senior Lender is lending up toDollars ($00) to Company ("Senior Loan") in connection with the construction and mini-permanent financing of a hotel in , ("Project").
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 'Senior Loan' obtained by the franchisee's company is specifically purposed for financing the construction and mini-permanent financing of a hotel project.
The franchisor, Marriott International Capital Corporation (MICC), provides credit enhancement for a portion of this Senior Loan, up to a specified dollar amount, as part of a Credit Enhancement Agreement with the Senior Lender. This arrangement necessitates that the Grantors (those who own interests in the franchisee's company) execute a Security Agreement.
This Security Agreement ensures the performance of obligations and payment of indebtedness under the Reimbursement Agreement, Guaranty Agreement, and Hazardous Substances Indemnity Agreement. These agreements collectively define the liabilities secured by the Security Agreement, indicating a comprehensive risk management approach by MICC in supporting the hotel project's financing.