What is the Three-Party Agreement related to for Hawthorn Suites By Wyndham?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer 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 |
Source: Item 22 — CONTRACTS (FDD page 92)
What This Means (2025 FDD)
According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, the Three-Party Agreement involves the lender, franchisee, and franchisor. The agreement outlines the lender's rights regarding the Franchise Agreement as collateral security for a loan they've provided or are about to provide to the franchisee.
The agreement is initiated because the franchisee seeks the franchisor's consent to assign a security interest in the Franchise Agreement to the lender. Hawthorn Suites By Wyndham, as the franchisor, consents to this collateral assignment, granting specific rights to the lender under the terms and conditions detailed in the Three-Party Agreement.
This agreement is crucial for franchisees who require financing to establish or operate their Hawthorn Suites By Wyndham location. It formalizes the relationship between the franchisor, franchisee, and lender, ensuring that all parties are aware of their rights and obligations. The Three-Party Agreement enables the franchisee to use the franchise agreement as collateral, facilitating access to necessary funding while protecting the interests of both the franchisor and the lender.
The agreement specifies that it is made and entered into as of a particular date by and among the lender, franchisee, and franchisor, each referred to as a "Party." It references the Franchise Agreement, which pertains to a guest lodging facility at a designated unit. The lender advances funds to the franchisee and wants certain rights regarding the Franchise Agreement as collateral for its loan. The franchisee requests that Hawthorn Suites By Wyndham consent to the security interest in the Franchise Agreement and grant rights to the lender. Hawthorn Suites By Wyndham will consent to the collateral assignment of the Franchise Agreement and grant such rights subject to the terms and conditions of the agreement.