What is the purpose of the Three-Party Agreement (TPA) offered by Hawthorn Suites By Wyndham?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
e under this Agreement.
| To Company: | |
|---|---|
| 22 Sylvan Way | |
| Parsippany, New Jersey 07054 | |
| Attention: Vice President, Contract Compliance | |
| Email Address: | |
| Suzanne.Fenimore@Wyndham.com | |
| To Lender: | |
| Address | |
| Attention: | |
| Fax Number: | |
| Email Address: | |
| To Franchisee: | |
| Address | |
| Attention: | |
| Fax Number: | |
| Email Address: |
Each of the undersigned, intending to be legally bound hereby, has executed this Agreement as of the date first written above.
COMPANY: LENDER:
REQUEST FOR THREE-PARTY AGREEMENT
| TO: | Vice President, Contracts Compliance | |
|---|---|---|
| ("Franchisor") | ||
| RE: | Current or Proposed Brand | |
| Unit | ||
| No.: ("Facility") | ||
| Located or to Be Located at | Name:("Franchisee") | |
| Current or Proposed Franchisee/Member | ||
| DATE:, 20 |
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.
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- Franchisee agrees to and submits herewith a non-refundable fee in the amount of $1,000 ("TPA Fee"), which must be paid to Franchisor prior to, and in partial consideration for, Franchisor's review of the request for a TPA. The TPA Fee is non-refundable even if Franchisor and Lender do not enter into a TPA.
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- Franchisee authorizes Franchisor to release (and consents to the transmittal of) any and all information about Franchisee's account with Company, the status of the Franchise Agreement and the franchise relationship, the results of any quality assurance inspections, and guest complaints to Lender and its counsel (but Franchisor is under no obligation to do so). Franchisor may provide a copy of the Franchise Agreement to Lender, but is not required to do so, and Franchisee solely is responsible for ensuring that Lender has a full and complete copy of the Franchise Agreement if Lender requests the same. Franchisee represents and warrants to Franchisor that Franchisee has disclosed to Lender the current status of the Franchise Agreement and Franchisee's performance under the same and that Franchisee will advise Lender of any changes in that status through the time of closing of the Loan.
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Source: Item 22 — CONTRACTS (FDD page 92)
What This Means (2025 FDD)
According to the 2025 FDD, Hawthorn Suites By Wyndham offers a Three-Party Agreement (TPA) to facilitate financing for franchisees. The TPA is offered to a lender to induce them to provide a loan to the franchisee, using the franchisee's interest in the Hawthorn Suites By Wyndham facility as security. This agreement is contingent upon the franchisee entering into a franchise agreement with Hawthorn Suites By Wyndham, paying the initial fee, and fulfilling any other requirements Hawthorn Suites By Wyndham deems necessary to finalize the franchise agreement.
For a prospective Hawthorn Suites By Wyndham franchisee, the TPA can be a crucial tool in securing funding to establish or maintain their franchise. By providing the lender with additional security and assurances, the TPA may increase the likelihood of loan approval and potentially improve the terms of the loan. However, franchisees should be aware that Hawthorn Suites By Wyndham's willingness to offer a TPA is conditional upon the execution of the franchise agreement and the payment of required fees.
The TPA essentially formalizes the relationship between the lender, the franchisee, and Hawthorn Suites By Wyndham, ensuring that all parties are aligned and that the lender has certain rights related to the franchise agreement as collateral for the loan. This arrangement is common in franchising, as it provides lenders with added security and comfort when financing franchise operations. Franchisees should carefully review the terms of the TPA to understand their obligations and the lender's rights in the event of a default.
Furthermore, the 2025 FDD states that the Franchise Agreement and certain ancillary agreements related to the Franchise Agreement collectively are referred to as the "Primary Agreements." Pursuant to the Primary Agreements, Franchisee operates the Facility as a ® franchised location. Capitalized terms used and not defined in this Agreement shall have the meanings given to them in the Franchise Agreement.