What does Hawthorn Suites By Wyndham use the construction cost information for?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Construction Costs. Before we authorize you to open the Facility, we may request that you furnish us with information about the construction costs of the Facility by providing a copy of your contractor's application for payment on AIA form G702 and G703 or other documentation reasonably acceptable to us. We will use this information, along with similar information obtained from other franchisees, to more accurately project the cost of developing new construction Facilities in the United States, which we are required to disclose in our Franchise Disclosure Document for new franchisees. We will not disclose outside of our organization or our consultants any information you give to us in a manner which would enable other franchisees or persons to determine your costs for constructing your Facility.
Source: Item 22 — CONTRACTS (FDD page 92)
What This Means (2025 FDD)
According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, the franchisor may request construction cost information from franchisees before authorizing the opening of a new facility. This information, typically provided through a contractor's application for payment using AIA forms G702 and G703 or similar documentation, is used to project the cost of developing new construction facilities in the United States. This projection is a required disclosure in the Franchise Disclosure Document for new franchisees.
Hawthorn Suites By Wyndham uses this data, gathered from multiple franchisees, to create a more accurate estimate of construction costs for potential franchisees. This helps ensure that prospective franchisees have a reasonable expectation of the costs involved in building a new Hawthorn Suites By Wyndham location. By compiling data from various sources, the franchisor aims to provide a reliable and realistic financial outlook for new construction projects.
The FDD states that Hawthorn Suites By Wyndham will not disclose any individual franchisee's cost information in a way that would allow others to determine their specific construction expenses. This measure is in place to protect the financial confidentiality of each franchisee. While the franchisor uses the aggregated data for projections, individual cost details remain private, preventing competitors or other franchisees from gaining insight into a specific franchisee's investment.
This practice is fairly common in the franchise industry, as franchisors need to provide potential franchisees with realistic cost estimates. By collecting and analyzing construction cost data, Hawthorn Suites By Wyndham can offer more informed guidance to new franchisees, helping them make sound financial decisions and plan effectively for their investment. This transparency and data-driven approach can contribute to a stronger, more successful franchise system.