Franchise agreement term

Definition

How many years are left on the brand agreement, and what the brand can require to renew.

Why It Matters

A branded hotel is worth what the brand delivers and the agreement has a clock on it, so a buyer who does not read the remaining term can close on an asset that needs a renovation and a new agreement within two years. The brand decides what renewal costs. Ask for the agreement itself, its expiration, the renovation the brand has already required, and what it has told the seller about renewal.