What constitutes 'Control' in the context of a Surestay Hotel By Best Western franchise?
Surestay_Hotel_By_Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
The following capitalized terms will have the meanings set forth after each term:
- "Affiliate" means any natural person or firm, corporation, partnership, limited liability company, association, trust or other entity which, directly or indirectly, controls, is controlled by, or is under common Control with, the subject entity.
- "Agreement" means this Franchise Agreement, including any exhibits, attachments and addenda.
- "Anti-Corruption Laws" means all applicable anti-corruption, anti-bribery, anti-money laundering, books and records, and internal controls laws of the United States and the United Kingdom, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010.
- "Brand" means the brand name (e.g., "SureStay", "SureStay Plus", or "SureStay Studio") set forth in the Addendum.
- "Change of Ownership Application" means the application that is submitted to us by you or the Transferee for a new franchise agreement in connection with a Change of Ownership Transfer.
- "Change of Ownership Transfer" means any proposed Transfer that results in a change of Control of Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by this Agreement, all as set out in Subsection 13.2.3.
- "Competing Brand" means a hotel brand or trade name that, in our sole business judgment, competes with the System, or any System Hotel.
Source: Item 23 — Receipts (FDD pages 88–286)
What This Means (2025 FDD)
According to the 2025 Surestay Hotel By Best Western Franchise Disclosure Document, 'Control' is defined within the context of 'Affiliate' and 'Change of Ownership Transfer'. An 'Affiliate' is any entity that directly or indirectly controls, is controlled by, or is under common control with the subject entity. A 'Change of Ownership Transfer' is any proposed transfer that results in a change of control of the Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by the agreement.
For a prospective Surestay Hotel By Best Western franchisee, this definition is important because it clarifies the circumstances under which a transfer of ownership would require franchisor approval. If a transfer results in a change of control, it is considered a 'Change of Ownership Transfer' and is subject to specific conditions outlined in Subsection 13.2.3 of the Franchise Agreement. This ensures that Surestay Hotel By Best Western maintains oversight over who operates its branded hotels and that any new operators meet their standards.
The definition of 'Affiliate' is also important because it extends the franchisor's control and influence beyond the immediate franchisee. If a franchisee is controlled by another entity, that entity is also subject to certain obligations and restrictions under the franchise agreement. This prevents franchisees from circumventing the agreement by operating through affiliated entities.
In summary, the definition of 'Control' in the Surestay Hotel By Best Western franchise agreement is broad and encompasses both direct and indirect control. It is a key factor in determining when a transfer of ownership requires franchisor approval and in ensuring that all parties involved in the operation of a Surestay Hotel By Best Western branded hotel are subject to the terms of the franchise agreement.