What is the definition of the 'Protected Territory' for a Hawthorn Suites By Wyndham franchise?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
cretion. You shall not affiliate or identify the Facility with another franchise system, reservation system, brand, cooperative or registered mark during the Term.
- 2. Protected Territory. While this Agreement is in effect, neither we nor any of our affiliates will open, or allow any party other than you to open, a Chain Facility in the "Protected Territory," as defined below. We may own, operate, lease, manage, franchise or license anyone to operate any Chain Facility located anywhere outside the Protected Territory without any restriction or obligation to you. We may grant protected territories that overlap your Protected Territory to other Chain Facilities. While this Agreement is in effect, neither you, any of your affiliates, nor any of your officers, directors, general partners or owners of 25% or more of your Equity Interests, may own, operate, lease, manage or franchise any timeshare resort, vacation club, residence club, fractional ownership residence, condominium/apartment leasing or rental business, or the like, for any facility or business that shares directly or indirectly, common areas, amenities, recreation facilities, services, supplies or support activities with the Facility. This Section does not apply to any Chain Facility located in the Protected Territory on the Effective Date, which we may renew, relicense, allow to expand, or replace with a replacement Facility located within the same trading area having not more than 120% of the guest rooms of the replaced Chain Facility if its franchise with us terminates or is not renewed. You acknowledge that the Protected Territory fairly represents the Facility's trading area, that there are no express or implied territorial rights or agreements between the parties except as stated in this Section, and all rights not expressly granted to you are reserved by us and our affiliates.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 78–83)
What This Means (2025 FDD)
According to the 2025 Hawthorn Suites By Wyndham FDD, the franchisor grants a protected territory, but the specific definition of that territory is not provided in the excerpt. The FDD states that while the Franchise Agreement is in effect, neither Hawthorn Suites By Wyndham nor its affiliates will open, or allow any party other than the franchisee to open, a Chain Facility in the "Protected Territory." However, Hawthorn Suites By Wyndham retains the right to operate Chain Facilities outside of the Protected Territory without obligation to the franchisee. Furthermore, Hawthorn Suites By Wyndham may grant overlapping protected territories to other Chain Facilities.
The agreement also stipulates certain restrictions on the franchisee and its affiliates regarding ownership, operation, or franchising of timeshare resorts, vacation clubs, or similar businesses that share common resources with the Hawthorn Suites By Wyndham facility. This restriction is in effect while the Franchise Agreement is active.
It's important to note that any Chain Facility existing within the Protected Territory on the Effective Date is exempt from these protections, allowing Hawthorn Suites By Wyndham to renew, relicense, expand, or replace such facilities. The franchisee acknowledges that the Protected Territory represents the Facility's trading area, and that all rights not expressly granted are reserved by Hawthorn Suites By Wyndham and its affiliates. The Protected Territory definition is left blank in the franchise agreement. A prospective franchisee should clarify the specifics of the Protected Territory, including its size and boundaries, during the due diligence process before signing the Franchise Agreement.