To whom should a Hawthorn Suites By Wyndham franchisee address a request for a Three-Party Agreement?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned duly-authorized representative of Franchisee requests that Franchisor offer and issue a Three-Party Agreement ("TPA") in favor of the "Lender" named below for the purpose of inducing Lender to loan funds (the "Loan") to Franchisee secured by Franchisee's interest in the Facility. Franchisee understands and agrees to the following conditions that apply to the offer and issuance of the TPA. If Franchisee is not currently a party to a franchise agreement with Franchisor pertaining to the Facility, the offer and issuance of the TPA by Franchisor will be subject to the execution of such a franchise agreement (the franchise agreement, including all amendments and ancillary agreements, the "Franchise Agreement"); the payment of an initial fee or affiliation fee, as applicable; and Franchisor's receipt of such other documents Franchisor deems necessary to consummate the closing of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Hawthorn Suites By Wyndham FDD, a franchisee who needs a Three-Party Agreement (TPA) to secure financing should have their request directed to the franchisor. The FDD indicates that the franchisee formally requests that Hawthorn Suites Franchising, Inc. offer and issue the TPA to the lender. This agreement is intended to encourage the lender to provide funds to the franchisee, using the franchisee's interest in the Hawthorn Suites By Wyndham facility as security.
This process implies that Hawthorn Suites By Wyndham plays an active role in facilitating the financing arrangements between the franchisee and the lender. The issuance of the TPA is subject to certain conditions, including the existence of a franchise agreement between the franchisee and Hawthorn Suites By Wyndham. If a franchise agreement is not already in place, the TPA will only be offered once the agreement is executed, the initial fees are paid, and any other required documents are received by Hawthorn Suites By Wyndham.
For a prospective Hawthorn Suites By Wyndham franchisee, this means that securing financing may depend on the franchisor's willingness to issue a TPA. Franchisees should ensure they understand the conditions under which Hawthorn Suites By Wyndham will provide this agreement. This also highlights the importance of maintaining a good relationship with the franchisor, as their cooperation is crucial for obtaining financing. The Three-Party Agreement is among Hawthorn Suites Franchising, Inc., the franchisee, and the lender.
It is also important to note that the FDD states that the offer and issuance of the TPA by Hawthorn Suites By Wyndham is contingent upon the execution of a franchise agreement, payment of initial fees, and receipt of any other documents deemed necessary by Hawthorn Suites By Wyndham. This underscores the franchisor's control over the financing process and the need for franchisees to comply with all requirements to secure a TPA.