What is the purpose of the liquidated damages payment for Hawthorn Suites By Wyndham?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
ity having jurisdiction over this Agreement limits your ability to pay, and our ability to receive, the Liquidated Damages you are obligated to pay hereunder, you shall be liable to us for any and all damages that we incur, now or in the future, as a result of your breach of this Agreement. Liquidated Damages are paid in place of our claims for lost future Recurring Fees under this Agreement. The portion of Liquidated Damages collected that are attributable to the Marketing/Reservation Contributions will be credited to the Marketing Fund. Our right to receive other amounts due under this Agreement is not affected.
- 12.2 Condemnation Payments. In the event a Condemnation is to occur, you will pay us the fees set forth in Section 7 for a period of one year after we receive the initial notice of condemnation
described in Section 11.3.2, or until the Condemnation occurs, whichever is longer (the "Notice Period"). You will pay us Liquidated Damages equal to the average daily Royalties and Marketing/Reservation Contributions for the one-year period preceding the date of your condemnation notice to us multiplied by 365 less the number of days in the Notice Period. This payment will be made within 30 days after Condemnation is completed (when you close the Facility or you deliver it to the condemning authority). You will pay no Liquidated Damages if the Condemnation is completed after the Notice Period expires. For the sake of clarity, you must continue to pay when due the fees, set forth in this Agreement, including under Section 7, and all other agreements with us or our affiliates pertaining to the Facility until Condemnation is completed.
13. Your Duties At and After Termination. When a Termination occurs for any reason whatsoever:
- 13.1 System Usage Ceases. You must comply with the following "de-identification" obligations.
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, liquidated damages are paid in place of claims for lost future recurring fees under the Franchise Agreement. These fees include royalties and marketing/reservation contributions. The portion of liquidated damages collected that are attributable to the Marketing/Reservation Contributions will be credited to the Marketing Fund. Hawthorn Suites By Wyndham's right to receive other amounts due under the agreement is not affected.
If the Hawthorn Suites By Wyndham facility has been open for fewer than 12 months, the liquidated damages amount will be the average monthly recurring fees since the opening date multiplied by 36. Franchisees will also pay any applicable taxes assessed on such payment and interest calculated under Section 7.3 accruing from 10 days after the date of termination. Before the ending period, liquidated damages will not be less than the product of $3,000 multiplied by the number of guest rooms that the franchisee is authorized to operate under Schedule B of the agreement as of the termination.
If Hawthorn Suites By Wyndham authorizes a franchisee to reduce the number of rooms at the facility after the opening date, they reserve the right to charge liquidated damages for those rooms on a per-room basis, either at the time they are removed from the facility's inventory or at termination. If Hawthorn Suites By Wyndham terminates the agreement under Schedule D before the opening date, then the franchisee will pay them, within 10 days after receiving the notice of termination, liquidated damages in an amount equal to $1,500 per guest room described on Schedule B. If any valid, applicable law or regulation limits the franchisee's ability to pay, and Hawthorn Suites By Wyndham's ability to receive, the liquidated damages, the franchisee shall be liable for any and all damages that they incur as a result of the breach of the agreement.