For Surestay Hotel By Best Western, can 'Control' be established through a contract?
Surestay_Hotel_By_Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each Party to the other Party in this Agreement, the Parties agree as follows:
1.0 DEFINITIONS
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, the term "Affiliate" is defined to include entities under common control with the subject entity. The document defines "Change of Ownership Transfer" as any transfer that results in a change of control of the franchisee, the hotel, or the hotel site, unless otherwise permitted by the agreement.
Specifically, the definition of "Affiliate" includes any entity that directly or indirectly controls, is controlled by, or is under common control with the subject entity. This definition is important because it broadens the scope of who is considered related to the franchisee, which can have implications for various aspects of the franchise agreement, including transfers, compliance, and potential conflicts of interest.
The definition of "Change of Ownership Transfer" indicates that any transfer resulting in a change of control requires Surestay Hotel By Best Western's approval, ensuring that the franchisor maintains oversight over who operates a franchise within their system. This clause protects Surestay Hotel By Best Western by ensuring they have a say in who operates a Surestay Hotel By Best Western franchise, maintaining brand consistency and standards. A prospective franchisee should carefully review the sections of the franchise agreement that refer to "Affiliates" and "Change of Ownership Transfer" to fully understand their obligations and restrictions.