What documents are required to receive the Development Incentive from Hawthorn Suites By Wyndham?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
collect reasonable attorney's fees and all costs of collection.
To receive the Development Incentive, you and your principals, as co-makers, must sign a Development Incentive Note, which will specify the amount of the incentive, in the form attached to Exhibit C-1 when
you sign and deliver to us the Franchise Agreement. If you and/or your principals are residents of community property or certain other states, your and /or their spouses must also co-sign the Development Incentive Note. In addition, you must sign an addendum to the Franchise Agreement, agreeing to make all payments due under the Franchise Agreement and ancillary agreements through electronic funds transfers through the ACH (automated clearing house) system. You must provide us with a current balance sheet, loan documents and other information we request detailing the total cost of the Facility, the amount being financed, and your equity investment in the Facility. If we offer you a Development Incentive, you may not be eligible for any reduction in Initial or Recurring Fees (see Items 5, 6 and 15). The Development Incentive program may be modified, limited, extended, or terminated at any time without advance notice or amendment of this Franchise Disclosure Document.
The Development Incentive will be disbursed after (i) you have passed a final credit review with no material adverse changes in your business, legal, litigation, bankruptcy status or finances, or of your guarantors or the Facility since preliminary approval, (ii) the Facility officially opens with our consent, (iii) you have completed all required pre-opening improvements specified in the Franchise Agreement; (iv) you have paid the Initial Fee; (v) you are in good standing under the Franchise Agreement and all ancillary agreements; and (vi) you have completed any other pre-requisites for disbursement that you and we agree to in the Franchise Agreement. Additionally, we may require you to use the services of an approved procurement service provider, or purchase directly from a manufacturer or approved supplier, as outlined below.
Source: Item 10 — FINANCING (FDD pages 58–60)
What This Means (2025 FDD)
According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, to receive the Development Incentive, franchisees and their principals must sign a Development Incentive Note, which specifies the incentive amount and is in the form attached to Exhibit C-1. If the franchisee or their principals reside in a community property state, their spouses must also co-sign the Development Incentive Note. Additionally, franchisees must sign an addendum to the Franchise Agreement, agreeing to make all payments due under the Franchise Agreement and ancillary agreements through electronic funds transfers via the ACH system.
Furthermore, Hawthorn Suites By Wyndham requires franchisees to provide a current balance sheet, loan documents, and other information detailing the total cost of the facility, the amount being financed, and the franchisee's equity investment in the facility. The Development Incentive is a loan that is not subject to repayment unless the franchise terminates before the end of the term of the Franchise Agreement for the Facility or a Transfer occurs. The Development Incentive Note bears no interest except in the case of default, in which case the interest rate will be 18% per annum (1.5% per month) or the highest rate allowed by law.
It is important to note that the Development Incentive will be disbursed only after several conditions are met. These include passing a final credit review with no material adverse changes, the facility officially opening with Hawthorn Suites By Wyndham's consent, completion of all required pre-opening improvements, payment of the Initial Fee, and being in good standing under the Franchise Agreement and all ancillary agreements. Franchisees must also complete any other pre-requisites for disbursement agreed upon in the Franchise Agreement.
Prospective franchisees should be aware that the Development Incentive program may be modified, limited, extended, or terminated at any time without advance notice or amendment to the Franchise Disclosure Document. Additionally, Hawthorn Suites By Wyndham may require franchisees to use the services of an approved procurement service provider or purchase directly from a manufacturer or approved supplier.