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

Hawthorn_Suites_By_Wyndham Franchise · 2025 FDD

Answer from 2025 FDD Document

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THIS SAFE-T SUITE SERVICES ADDENDUM, INCLUDING THE SAFE-T SUITE TERMS AND CONDITIONS AND EXHIBITS INCORPORATED HEREIN, IS THE COMPLETE AND ENTIRE UNDERSTANDING OF THE PARTIES REGARDING THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR WRITTEN OR ORAL AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS WITH RESPECT THERETO, INCLUDING, WITHOUT LIMITATION, ANY PURCHASE ORDER OR PROPOSAL.

IN WITNESS WHEREOF, Customer has caused a duly authorized representative to execute this SAFE-T Suite Services Addendum on behalf of Customer as of the Addendum Effective Date, as provided below.

,

| "CUSTOMER" | | (DBA Name) | | |------------|------------|-------------------|--------| | By: | | (Signature) | | | Name: | | (Printed Name) | | | Title: | | | | | Date: | | | | | | ("Addendum | Effective | Date") |

EXHIBIT C-4

THREE-PARTY AGREEMENT

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
Agreement shall be strictly adhered to on and after the date of this Agreement.
2.
Company Consent; No Representations or Warranties.
2.1.
Company consents to the collateral assignment of, and granting of a security interest in, the

Franchise Agreement by Franchisee to Lender as partial security for Franchisee's obligations to Lender, subject to the terms and conditions of this Agreement. Unless and until Lender notifies Company in writing that it has exercised its rights to the collateral as the secured party under the collateral assignment and that it has assumed the benefits and obligations of the Primary Agreements (and without limiting Lender's obligations under Section

to the Primary Agreements and the franchise relationship between Company and Franchisee.

  • 2.2. Company has not provided, and in entering into this Agreement is not providing, any representation, endorsement, or recommendation to or about any other Party; about any representation that either Lender or Franchisee may have made to the other; or otherwise pertaining to the loan.
  • 2.3.

Source: Item 22 — CONTRACTS (FDD page 92)

What This Means (2025 FDD)

According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, the Lender in a Three-Party Agreement (TPA) advances funds to the franchisee, securing the loan with the franchisee's interest in the Hawthorn Suites By Wyndham facility. The lender seeks specific rights related to the Franchise Agreement as collateral for the loan. The Three-Party Agreement outlines the conditions under which the lender can protect its investment in the event the franchisee defaults on their loan obligations. The agreement is among the Lender, Franchisee, and Franchisor.

The Lender is required to notify Hawthorn Suites By Wyndham in writing if they initiate any judicial or non-judicial action, such as seeking the appointment of a receiver or commencing foreclosure proceedings due to the franchisee's default. The lender must also provide Hawthorn Suites By Wyndham with copies of any related pleadings, notices, agreements, or other documents associated with such actions. This ensures that Hawthorn Suites By Wyndham is informed of any potential issues that could affect the operation or ownership of the Hawthorn Suites By Wyndham franchise.

The Three-Party Agreement terminates automatically when the lender no longer has a security interest in the Facility, the loan is paid in full, the license under the Franchise Agreements expires, the Lender assumes the Primary Agreements, or the Lender assigns its interest in the loan to a third party not permitted by the agreement. Hawthorn Suites By Wyndham retains the right to charge an administrative fee for issuing a replacement three-party agreement if the loan is transferred to a successor mortgagee or a trustee in connection with loan securitization, provided the transferee is reasonably acceptable to the company.

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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