What conditions must be met for a Hawthorn Suites By Wyndham franchisee to transfer the facility?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
ON SET FORTH HEREIN. Also, at least fifteen (15) days prior to closing such financing, you shall submit to us a written statement certifying that you have not misrepresented or overstated your relationship with us and our affiliates or your rights to use the Marks.
- 9.3 Conditions. We may condition and withhold our consent to a Transfer when required under this Section 9 until the transferee and you meet certain conditions; however, we will not unreasonably withhold, delay or condition our consent to a Transfer if the Facility is then financed under a program in which the United States Small Business Administration ("SBA") guarantees the financing or its repayment. If a Transfer is to occur, the transferee (or you, if an Equity Transfer is involved) must first complete and submit our application; qualify to be a franchisee in our sole discretion, given the circumstances of the proposed Transfer; provide the same supporting documents as a new franchise applicant; pay the Application Fee and Relicense Fee then in effect; sign the form of Franchise Agreement we then offer in conversion transactions; and agree to renovate the Facility as if it were an existing facility converting to the System, as we reasonably determine. We will provide a required PIP after we receive the transferee's Application. We may require structural changes to the Facility if it no longer meets System Standards for entering conversion facilities, or, in the alternative, condition our approval of the Transfer on limiting the transferee's term to the balance of your Term, or adding a right to terminate without cause exercisable by either party after a period of time has elapsed. Our consent to the transaction will not be effective until these conditions are satisfied. If we do not approve the Transfer, we may, in our sole discretion, allow you to terminate the Franchise when you sell the Facility and pay us Liquidated Damages under Section 12.1. Such payment would be due and payable when you transfer possession of the Facility. We also must receive general releases from you and each of your owners, and payment of all amounts then owed to us and our affiliates by you, your owners, your affiliates, the transferee, its owners and affiliates, under this Agreement or otherwise.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 78–83)
What This Means (2025 FDD)
According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, the franchisor may set conditions for and withhold consent for a transfer until certain requirements are met by both the current franchisee and the potential transferee. However, Hawthorn Suites By Wyndham will not unreasonably withhold, delay, or condition consent if the facility is financed under a program guaranteed by the United States Small Business Administration (SBA).
To proceed with a transfer, the potential transferee (or the current franchisee in an Equity Transfer) must first submit a complete application and supporting documents, similar to a new franchise applicant. The transferee must also qualify as a franchisee, which is determined by Hawthorn Suites By Wyndham at their discretion based on the transfer's circumstances. Additionally, the transferee must pay the application fee and relicensing fee that are in effect at the time of the transfer. The transferee needs to sign the current franchise agreement offered for conversion transactions and agree to renovate the facility to meet system standards, as determined reasonably by Hawthorn Suites By Wyndham. A property improvement plan (PIP) will be provided after the application is received.
Hawthorn Suites By Wyndham may also require structural changes to the facility if it no longer meets the system standards for conversion facilities. Alternatively, they may condition the transfer approval by limiting the transferee's term to the remaining balance of the original term or adding a clause that allows either party to terminate the agreement without cause after a certain period. The franchisor's consent to the transfer is not effective until all these conditions are satisfied. Furthermore, Hawthorn Suites By Wyndham must receive general releases from the current franchisee and their owners, along with payment of all outstanding amounts owed to Hawthorn Suites By Wyndham and its affiliates by the franchisee, their owners, the transferee, and their respective owners and affiliates.