Hawthorn Suites by Wyndham Franchise

Financing Details

Hawthorn Suites Franchising, Inc. offers several financing options. Franchisees may defer payment of the Initial Fee, typically for a short term such as 90 days or until the facility opens, without interest unless a default occurs. Repayment is usually made in up to three equal installments. The franchisor also provides "Development Incentives" in the form of a loan for new construction and conversion facilities. These incentives are based on factors like room count, location, and market. The loan is disbursed after the facility's opening and is forgiven over the 20-year term of the Franchise Agreement (1/20th annually), meaning the loan is fully forgiven by the end of the term if the agreement remains active. However, if the franchise terminates or is transferred before the term ends, the outstanding balance of the Development Incentive must be repaid. This loan bears no interest unless a default occurs, at which point an 18% annual interest rate applies. Hawthorn Suites Franchising, Inc. also offers specific Development Incentive programs for women entrepreneurs ("Women Own the Room") and Black entrepreneurs ("Black Owners & Lodging Developers"), targeting $2,500 per guest room (up to 50% of the franchisee's equity investment) along with personalized guidance. Franchisees can also request a Lender Notification Agreement for any third-party financing they arrange.

Litigation Summary

Hawthorn Suites Franchising, Inc. itself has no pending litigation. However, its parent company, Wyndham Hotels & Resorts, Inc., and various affiliates have been involved in several legal matters. Currently, there are four pending lawsuits against the parent company or its affiliates. These include three class action lawsuits filed in 2024 alleging price-fixing and unfair competition through the use of revenue management software, and a class action suit filed in 2014 in Canada regarding allegedly undisclosed "Destination Marketing Fees." Additionally, Wyndham Hotel Group LLC filed a lawsuit in November 2024 against a franchisee for non-payment of outstanding amounts owed. In the past, the parent company and its affiliates have resolved six other lawsuits between 2012 and 2020. These resolved cases included class actions related to alleged misleading resort fees, antitrust violations for online advertising, wrongful termination of franchise sites, surreptitious recording of phone calls, and FTC charges related to cyberattacks. In total, Hawthorn Suites Franchising, Inc. and its affiliates have disclosed 11 litigation cases, including pending and resolved matters.

Renewal Conditions

While Hawthorn Suites Franchising, Inc. states that franchisees have no automatic renewal or extension rights, if the franchisor and franchisee elect to renew, the franchisee must apply for a renewal franchise agreement between six and nine months before the current agreement expires. Conditions for renewal include signing the franchisor's then-current Franchise Agreement (which may have materially different terms and fees), paying the then-current Relicense Fee (calculated using the same formula as the Initial Fee), executing a general release, and completing any required property improvement plan. For Dual Brand Operations, both the Hawthorn and La Quinta agreements must be renewed simultaneously and are subject to the sole discretion of each franchisor.

Staffing Notes

Hawthorn Suites Franchising, Inc. mandates specific staffing requirements for its facilities. While franchisees are not required to personally manage the facility, they must either do so or hire a management company or individual manager with significant training and experience in general management of similar lodging facilities. The franchisor reserves the right to require franchisees to retain an approved third-party manager if the franchisee lacks substantial hotel management experience or is receiving a Development Incentive. The facility's general manager must successfully complete the franchisor's Hospitality Management Program within 90 days of the opening date or assuming the role, and is required to recertify every eight years. Additionally, general managers must complete Human Trafficking Prevention Training biennially and certify that all hotel staff have also been trained. All team members are required to complete Count on Us training. Franchisees are solely responsible for all employment decisions, including recruitment, hiring, firing, scheduling, compensation, and personnel policies. All personnel in designated positions must attend and successfully complete initial and other training programs as required. The entire hotel team also has access to ongoing learning and development support through Wyndham University and regional workshops for a yearly fee.