Hotel Franchise Agreements and Comfort Letters: Legal Challenges for Real Estate Lenders
Negotiating Comfort Letters; Responding to Provisions in Franchise Agreements That Impact Hotel Loans
Recording of a 90-minute CLE webinar with Q&A
This CLE webinar will enable lender’s counsel to review and negotiate hotel franchise comfort letters. The panel will also review standard features of hotel franchise agreements and the provisions of most concern to lenders. Finally, the panel will discuss how early termination, PIP and other franchise conditions can be addressed in the loan documents.
- Comfort letters—key provisions
- Notice and cure—monetary and non-monetary
- Acquisition and assumption by lender—option to terminate
- Subsequent sale/assignment by lender after foreclosure
- Subordination of franchise agreement
- Consent to collateral assignment
- Assignment of loan by lender—portfolio and CMBS lenders
- Franchise agreement—key provisions
- Fees, fee reductions
- Remaining term/ termination and liquidated damages provisions
- Right of first offer and right of first refusal
- Property management rights
- Area of protection
- Guaranty—ability to assign
- Property improvement plan
- Loan documents revisions to address PIP, termination and other franchise issues
The panel will review these and other key issues:
- What are the critical elements of the franchise comfort letter in hotel finance?
- What lender protection provisions should be included in the comfort letter?
- Which provisions in the franchise agreement are most important to the lender?
- What provisions should be included in loan documents to address early termination, PIP and other issues?
Tara K. Gorman
Ms. Gorman represents sellers, owners and licensors in the acquisition, disposition, finance, development, management... | Read More
Ms. Gorman represents sellers, owners and licensors in the acquisition, disposition, finance, development, management and leasing of major hospitality, resort and commercial properties. Her property deal portfolio includes domestic and international hotels, office buildings, condo-hotels, water parks, casinos, restaurants and retail stores. Additional areas of practice depth include telecommunications and finance. She counsels clients on management and licensing and branding agreements, website service, telecom licensing and lease agreements. She frequently speaks and writes on emerging real estate issues, including on brand standards in hotel management agreements and best practices in hotel sale negotiations.Close
Jeffer Mangels Butler & Mitchell
Guy Maisnik has over three decades of commercial real estate transactions with a strong expertise in hotels and... | Read More
Guy Maisnik has over three decades of commercial real estate transactions with a strong expertise in hotels and finance. A partner and Vice Chair of the JMBM Global Hospitality Group, Guy is a senior member of the JMBM Chinese Investment Group and a partner in the JMBM Real Estate Department. He advises clients on hospitality transactions, with both a practical business and legal focus, representing buyers, sellers, lenders, opportunity funds, special servicers, REITs and developers in hotel transactions, joint ventures, hotel management agreements and franchise agreements, buying, selling and ground leasing of hotels, complex mixed-used development and fractional and timeshare structuring.Close
Founder and CEO
JF Capital Advisors
Mr. Falik leads the firm's hospitality business, which includes equity and debt placement, asset acquisitions and... | Read More
Mr. Falik leads the firm's hospitality business, which includes equity and debt placement, asset acquisitions and dispositions, portfolio transactions, JV structuring, asset management, management company and brand evaluation, and strategic and capital markets advisory services. Previously, he was a Senior Managing Director and the Head of Hospitality Capital Markets at BGC Real Estate Capital Markets. Simultaneously, he was the Head of Hotel Investment Sales for Newmark Grubb Knight Frank. Prior to that, he was a Managing Director and Head of the Lodging and Leisure Investment Banking group at Cantor Fitzgerald & Co. Prior to joining Cantor Fitzgerald, he was the founder and CEO of JF Capital Advisors, a lodging advisory and principal investment firm.Close