What is a 'Replacement Event' in the context of a Springhill Suites By Marriott comfort letter?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor will issue a replacement comfort letter on the form of comfort letter in Franchisor's then-current franchise disclosure document, if Lender: (A) transfers the Loan to a successor mortgagee that is a financial institution in the business of routinely financing real estate transactions or designates a trustee of a trust established in connection with the securitization of the Loan (each, a "Replacement Event"), provided that such transferee or designee (i) is not a Competitor, an Affiliate of a Competitor, or a Restricted Person, (ii) is not an Affiliate of Franchisee or an Interestholder in Franchisee; and (iii) is not a Person which currently develops or operates any Franchisor Products and is not an Affiliate of, or an Interestholder in, such Person; and (B) provides a written request to Franchisor, no later than 90 days after the Replacement Event, to issue a replacement comfort letter, and includes in such request: (i) the name and address of the entity for which the replacement comfort letter is requested to be issued, (ii) the name, address, telephone number, and email address for the contact person for such entity, (iii) the date of the Replacement Event, and (iv) a statement that the Loan is not in default; and (C) enters into such replacement comfort letter within 60 days of receipt of a draft comfort letter from Franchisor.
Source: Item 17 — , "Renewal, Termination, Transfer, and Dispute Resolution," is amended by the addition of the following paragraph(s) at the conclusion of the Item: (FDD pages 285–553)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, a 'Replacement Event' is defined within the context of a replacement comfort letter. This event occurs when a lender transfers a loan to a successor mortgagee that is a financial institution routinely involved in real estate financing or designates a trustee for a trust established for loan securitization.
For a Springhill Suites By Marriott franchisee, this means that if the lender providing financing for their franchise transfers the loan, under certain conditions, the franchisor, Springhill Suites By Marriott, will issue a new comfort letter. This is contingent on the new mortgagee or trustee not being a competitor, an affiliate of a competitor, a party affiliated with the franchisee, or a person involved in developing or operating competing products.
To obtain a replacement comfort letter, the lender must request it in writing within 90 days of the Replacement Event. The request must include the name and address of the entity needing the letter, contact information, the date of the event, and a statement confirming the loan is not in default. The lender must then enter into the replacement comfort letter within 60 days of receiving a draft from Springhill Suites By Marriott.