Under what circumstances can a lender acquire ownership of a Delta Hotels By Marriott hotel?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
ght to cure for such reasonable period beyond the cure period established in the default notice if: (i) the default is not related to health or safety; (ii) the default is susceptible to cure by Lender; (iii) Lender notifies Franchisor of Lender's agreement to cure the default as soon as reasonably possible, but by no later than two days before expiration of the cure period established in the default notice; (iv) all fees, charges, and other amounts due Franchisor or any of its Affiliates under the Franchise Agreement or in connection with the Hotel are kept current; (v) Lender diligently pursues cure of the default; and (vi) the Hotel is at all times operated in accordance with the Franchise Agreement, except for the specific default described in the default notice.
2. Lender Foreclosure.
A. If Lender acquires ownership, control or possession of the Hotel by foreclosure, a deed in lieu of foreclosure, or any other exercise of its rights as a secured lender, and Lender desires that the Hotel continue to be operated as part of the «brand» system of hotels, then: (i) Lender may, by notice and payment to Franchisor of a non-refundable $5,000 application fee within 10 days after Lender acquires ownership, control or possession of the Hotel, request Franchisor to enter into a new franchise agreement and consent to substitute management for the Hotel; and (ii) within 30 days after such request, Lender and Franchisor will execute a new franchise agreement on the then-current form for the «brand» system of hotels, subject to the satisfaction of the terms of Paragraph 2 and Paragraph 4. Such new franchise agreement will be dated as of the date that Lender acquired ownership, control or possession of the Hotel, will be for a term equal to the then-remaining term of the Franchise Agreement, and will otherwise be on the form of franchise agreement in Franchisor's then-current franchise disclosure document with such changes as Franchisor may require to address the specific circumstances of the Hotel, except that Lender will not be required to pay the stated application fee or implement a typical change of ownership property improvement plan. Instead, Lender will only be required to: (a) pay the $5,000 application fee set forth in the first sentence of this Paragraph 2.A.; (b) pay Franchisor's outside counsel costs in connection with the new franchise agreement and related agreements; (c) cure any quality, service, or other deficiency in Franchisee's prior performance of its obligations under the Franchise Agreement and under any other agreements with Franchisor and its Affiliates relating to the Hotel, but excluding any unpaid liquidated damages; and (d) comply with the renovation and upgrading requirements that are stated in the Franchise Agreement or that are otherwise required of other «brand» franchisees. If Lender fails to comply with any of the conditions (including the deadlines) set forth in this Paragraph 2, then Lender will be deemed to have waived its rights hereunder.
- B. Franchisor's obligations under Paragraph 2.A.
Source: Item 6 — Obligations of Franchisee.** Franchisee agrees to the following: (FDD pages 363–513)
What This Means (2025 FDD)
According to Delta Hotels By Marriott's 2025 Franchise Disclosure Document, a lender can acquire ownership, control, or possession of a Delta Hotels By Marriott hotel through foreclosure, a deed in lieu of foreclosure, or any other exercise of its rights as a secured lender. If the lender wishes to continue operating the hotel under the Delta Hotels By Marriott brand, it must notify the franchisor and pay a non-refundable $5,000 application fee within 10 days of acquiring the hotel.
Within 30 days of this request, the lender and Delta Hotels By Marriott will execute a new franchise agreement based on the then-current form, subject to certain conditions. The new agreement will be dated as of the date the lender acquired the hotel and will last for the remaining term of the original franchise agreement. The lender is not required to pay the standard application fee or implement a typical change of ownership property improvement plan.
However, the lender must pay the $5,000 application fee, cover Delta Hotels By Marriott's outside counsel costs for the new agreement, and address any deficiencies in the previous franchisee's performance. The lender must also comply with existing renovation and upgrade requirements. Failure to meet these conditions, including deadlines, results in a waiver of the lender's rights. Delta Hotels By Marriott also stipulates that the lender (or its involved parties) must not be a competitor or have affiliations with competitors, and must meet the franchisor's owner qualifications, including providing a guaranty acceptable to Delta Hotels By Marriott.