Under what condition can the Delta Hotels By Marriott franchise agreement be transferred?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
will execute an amendment to this Agreement that updates the ownership information in Exhibit A, and pay Franchisor's outside counsel costs related to such documentation, if any.
- B. Transfer to Affiliates; Transfer for Estate Planning Purposes. A Transfer of the Hotel or an Ownership Interest in Franchisee to an Affiliate of Franchisee, or a Transfer of an Ownership Interest in Franchisee for estate planning purposes to an immediate family member or to an entity owned by, or a trust for the benefit of, an immediate family member, in the case of each such Transfer, if the following requirements are met:
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- Franchisee or its Control Affiliate owns, directly or indirectly, more than 50% of the economic interests of the proposed transferee (if the transferee is an entity), and such Transfer does not otherwise result in a change of Control of Franchisee or the Hotel;
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- Franchisee provides the identity of the proposed transferee and its Interestholders, documentation acceptable to Franchisor evidencing the Transfer, and all other related information reasonably requested by Franchisor;
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- each Guarantor acknowledges the Transfer and reaffirms its obligations under the Guaranty and, if required by Franchisor, another party acceptable to Franchisor executes a guaranty substantially identical to the form in the then-current Disclosure Document;
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- Franchisee is not in breach or default under any of the Marriott Agreements, or if there is a breach or default, there is an agreement to cure such breach or default;
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- each new Interestholder is a Qualified Person, and Franchisee pays the fees for any required background checks; and
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- if Franchisor requests, Franchisee and such transferee will execute any documents required by Franchisor to reflect the Transfer, and Franchisee will pay Franchisor's outside counsel costs related to such documentation, if any.
- 17.4 Transfers Requiring Notice and Consent. Transfers of the Hotel or a Controlling Ownership Interest in Franchisee, a Control Affiliate or the Hotel may be made only with at least 45 days' advance notice to Franchisor and Franchisor's prior consent.
- A. Conditions to Transfer. Franchisor's consent to a Transfer under this Section 17.4 will be subject to satisfaction of the following conditions:
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- Franchisee provides Franchisor the identity of all parties and their Interestholders, a copy of the purchase agreement, the organizational documents of the transferee and its Interestholders, together with all other information reasonably requested by Franchisor;
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- payment by Franchisee of the then-current non-refundable property improvement plan fee (including any fees related to an extension thereof), and payment of the then-
current application fee for System Hotels to Franchisor by the transferee with its submission of the application. If Franchisor does not consent to the Transfer, Franchisor will refund the application fee, less $10,000;
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- transferee and any new Interestholder is a Qualified Person;
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Source: Item 23 — RECEIPTS (FDD pages 134–251)
What This Means (2025 FDD)
According to Delta Hotels By Marriott's 2025 Franchise Disclosure Document, the franchise agreement can be transferred with prior notice and consent from the franchisor. Specifically, a transfer of the hotel or a controlling ownership interest in the franchisee, a control affiliate, or the hotel requires at least 45 days' advance notice to Delta Hotels By Marriott and their prior consent.
Delta Hotels By Marriott's consent to a transfer is subject to several conditions. The franchisee must provide the identity of all parties and their interest holders, a copy of the purchase agreement, the organizational documents of the transferee and its interest holders, and any other information reasonably requested by Delta Hotels By Marriott. The franchisee must also ensure payment of the then-current non-refundable property improvement plan fee and the then-current application fee for System Hotels by the transferee. The transferee and any new interest holder must be a qualified person. If Delta Hotels By Marriott determines the transferee is not qualified to operate the hotel, they may require the retention of a management company consented to by them.
The transferee must execute the then-current form of franchise and related agreements, which will include standard terms for new franchise System Hotels, including current fees and charges. Delta Hotels By Marriott may shorten the duration of the new franchise agreement to the remaining term of the original agreement. The new agreement will also include a property improvement plan to address any necessary renovations. All amounts due to Delta Hotels By Marriott must be paid, and a general release of all claims against Delta Hotels By Marriott and its affiliates must be executed. Finally, the franchisee must cover Delta Hotels By Marriott's outside counsel costs related to the transfer.
Even if all the above conditions are met, Delta Hotels By Marriott may still withhold consent to a transfer if they determine that the proposed transferee's debt service or overall financial status will not permit the hotel to be operated in compliance with the brand's standards. Consent may also be withheld if an uncured breach or default of a Marriott Agreement exists without an agreement to cure it, if the hotel is not in good standing under the Quality Assurance Program, or if entering into the new franchise agreement would result in a default or breach of an existing agreement binding on Delta Hotels By Marriott.