Does Hawthorn Suites By Wyndham use derivatives for trading or speculative purposes?

According to the 2025 Franchise Disclosure Document, Hawthorn Suites By Wyndham manages market risks related to interest rates and foreign exchange rates. To mitigate these risks, Hawthorn Suites By Wyndham uses cash flow hedges as part of its overall strategy. However, the company explicitly states that it does not use derivatives for trading or speculative purposes. This indicates a conservative approach to financial risk management, focusing on hedging to offset existing exposures rather than engaging in speculative activities.

Specifically, Hawthorn Suites By Wyndham uses derivative instruments like interest rate swaps to manage interest rate fluctuations affecting its debt. Additionally, the company uses foreign currency forward contracts to reduce the risk associated with foreign currency-denominated receivables, payables, forecasted royalties, and earnings from foreign subsidiaries. These instruments are used to create a desired mix of fixed and floating rate assets and liabilities, ensuring stability in the face of market volatility.

For a prospective franchisee, this policy suggests that Hawthorn Suites By Wyndham's financial strategies are designed to minimize risk and maintain stability. This can be reassuring, as it implies that the franchisor is not taking undue risks that could impact the overall financial health of the company. Franchisees can be confident that Hawthorn Suites By Wyndham's approach to financial instruments is geared towards managing and reducing exposure to market risks rather than pursuing speculative gains.