Does the Springhill Suites By Marriott franchise agreement allow for termination by the franchisee?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTES:
- 3 You do not have a general right to terminate the franchise agreement. However, Section 21.2 of the franchise agreement permits you to terminate in the limited event of a casualty if the cost to restore the hotel to the same condition as existed previously is 60% or more of the hotel's replacement cost at the time of the casualty and you comply with the requirements of Section 21.2.
- 4 Section 21.1 of the franchise agreement permits either you or us to terminate in the limited event of a taking that would materially affect the continued operation of the hotel as a system hotel on a permanent basis.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 107–117)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, franchisees generally do not have the right to terminate the franchise agreement. However, there are limited exceptions where a franchisee can terminate the agreement.
Specifically, Section 21.2 of the franchise agreement allows the franchisee to terminate the agreement if a casualty event occurs and the cost to restore the hotel to its previous condition is 60% or more of the hotel's replacement cost at the time of the casualty. The franchisee must also comply with all the requirements outlined in Section 21.2 of the franchise agreement to exercise this termination right.
Additionally, Section 21.1 of the franchise agreement states that either Springhill Suites By Marriott or the franchisee can terminate the agreement if a taking occurs that would materially affect the continued operation of the hotel as a system hotel on a permanent basis. These are the only two instances where a franchisee-initiated termination is permitted according to the FDD.