factual

What is the role of the Franchisee in the Three-Party Agreement for a Hawthorn Suites By Wyndham franchise?

Hawthorn_Suites_By_Wyndham Franchise · 2025 FDD

Answer from 2025 FDD Document

This Three-Party Agreement (the "Agreement") is made and entered into as of, 20 by
and among
("Lender");
("Franchisee"); and
("Franchisor" or "Company").
Lender, Franchisee, and Franchisor each are referred to as a "Party" and collectively are referred to as the
"Parties."
RECITALS
A.
The Franchise Agreement. Franchisee and Franchisor entered into that certain franchise,
license or membership agreement, dated, 20
(the "Franchise Agreement"), related to a
guest lodging facility located at, designated as Unit #
(the "Facility"). 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.
B.
The Loan. Lender has advanced or is about to advance funds to Franchisee and desires to be
granted certain rights in respect of the Franchise Agreement
as part of the collateral security for its loan.
Franchisee has requested that Company consent to the conveyance of a security interest in the Franchise
Agreement and grant certain other rights to Lender. Company will issue its consent to the collateral assignment
of the Franchise Agreement and will grant such rights subject to the terms and
conditions
of this Agreement
and the undertakings by Lender and Franchisee set forth below.
AGREEMENT
NOW,
THEREFORE,
in
consideration
of
the
foregoing
and
the
terms,
conditions,
representations, promises, covenants, and consideration set forth below, the sufficiency of which are hereby
acknowledged as good, valuable, and adequate consideration, and intending to be legally bound, the Parties
agree as follows:
1.
Status of Primary Agreements.
1.1
Company and Franchisee represent that the Primary Agreements
are
in
full
force
and
effect
and
there
are
no
uncured
notices
of
default issued by Company or Franchisee under the Primary Agreements as of
the date of thisAgreement.
1.2
This Agreement is not intended to be, nor shall it be construed to create, a novation, accord
and satisfaction, or compromise of the obligations of Franchisee under the Primary Agreements or any other
obligation of Franchisee or any Guaranty to Company. Franchisee agrees that the terms of the Franchise

Source: Item 22 — CONTRACTS (FDD page 92)

What This Means (2025 FDD)

According to the 2025 Hawthorn Suites By Wyndham Franchise Disclosure Document, the franchisee is a key party in the Three-Party Agreement, which also involves the lender and the franchisor. The franchisee has requested that Hawthorn Suites By Wyndham consent to the conveyance of a security interest in the Franchise Agreement and grant certain other rights to the lender. This agreement outlines the terms and conditions under which Hawthorn Suites By Wyndham will consent to the collateral assignment of the Franchise Agreement and grant rights to the lender.

The Three-Party Agreement is initiated when a lender advances funds to the franchisee and seeks certain rights related to the Franchise Agreement as collateral security for the loan. The franchisee's role includes agreeing to the terms and conditions set forth in the agreement, representing that there are no uncured defaults under the Primary Agreements (Franchise Agreement and related ancillary agreements), and acknowledging that the agreement does not create a novation or compromise of their obligations under the Primary Agreements.

Essentially, the franchisee is the driving force behind the agreement, as they are the ones seeking financing and requesting Hawthorn Suites By Wyndham to consent to the security interest. The franchisee remains bound by the terms of the Franchise Agreement, and the Three-Party Agreement ensures that all parties (lender, franchisee, and Hawthorn Suites By Wyndham) are aligned regarding the financial obligations and operational requirements of the franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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