The agreement states no renewal options exist—what happens to franchisees at the end of the 20-year term, and what are the practical implications for a hotel franchise with long-term asset investments?
#1
Can you explain the distinction between the 8 units that "ceased other" in 2022 versus the 5 that closed in 2023? What specific circumstances led to these exits?
#2
With 2 pending litigation cases, what are the nature and claims of these cases, and do they involve systemic issues affecting multiple franchisees or unit-specific disputes?
#3
The investment costs score of 83 is above the typical range for this category—what are the total initial investment requirements including real estate, renovations, and pre-opening costs?
#4
Territory is protected but not exclusive—can the franchisor or other franchisees open competing Hawthorn Suites locations within my territory, and what specific geographic boundaries define my protected area?
#5
What encroachment protection exists if the franchisor attempts to establish a competing brand (such as a Wyndham or Days Inn property) near your location?
#6
The termination clause allows for 10-day cure periods for monetary defaults—what constitutes a monetary default, and are there any defaults that cannot be cured?
#7
Personal guarantees and indemnification requirements are noted—does this mean franchisees are personally liable for franchisor negligence, and are there any limitations on indemnification obligations?
#8
What specific support and training does the franchisor provide post-opening, and how are these services funded given the $734 annual technology fee and 2.5% ad fund?
#9
Can you provide the Item 19 financial performance data, including average unit volumes, operating expenses, and profitability by unit size or location type?
#10
How is the $734 annual technology fee allocated, and what technology services or systems does it cover?
#11
What is the franchisor's policy on transfers if a franchisee wants to sell their unit, and are there specific buyer approval criteria beyond the $40,000 transfer fee?
#12
Of the 3 litigation cases filed against the franchisor, what were the primary allegations, and have any resulted in settlements, judgments, or changes to franchise policies?
#13
Given the 0.0% termination rate, has the franchisor ever exercised termination rights, and under what circumstances would termination be pursued?
#14
The non-compete provision is listed as N/A—does this mean there are no non-compete restrictions, and can former franchisees open competing hotel brands in the same market?
#15
What are the current market trends affecting Hawthorn Suites unit profitability, particularly in light of the 21 units that closed over the past 3 years?
#16
Are there any franchise system-wide initiatives, capital improvement plans, or renovations required, and if so, are these mandatory and at what cost to franchisees?
#17
How does the franchisor support marketing and revenue management for individual units, and what metrics define marketing effectiveness?
#18