LICENSOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
We may provide any of these services through our employees and representatives, through our
affiliates or through any third party-provider we designate.
Under the Operating Agreement described in Item 1, Braxton Worldwide will – at all times acting on our
behalf – discharge all of our duties and obligations under Braxton franchise license agreements
governing outlets situated in the States, including: discharging all of our obligations to licensees;
managing the Braxton license network; marketing, offering and negotiating new and renewal franchise
license agreements as our franchise broker; furnishing assistance to Braxton licensees in the States;
implementing our quality assurance programs; and, otherwise on our behalf, discharging all duties we
owe under franchise license agreements governing Braxton outlets in the States.
Braxton Worldwide or its affiliates employ all the persons who will provide services to you on our behalf
under the terms of your Franchise License Agreement. If Braxton Worldwide fails to perform its
obligations under the Operating Agreement, then Braxton Worldwide may be replaced as the franchise
service provider. However, as the licensor, we will always be responsible for fulfilling all our duties and
obligations under your Franchise License Agreements.
PRE-OPENING PHASE OBLIGATIONS
After we approve your Application and/or you sign the Franchise License Agreement, but before you
open your outlet, we will:
(1) Loan to you a copy of our Manual and/or provide you with electronic access to the Manual on
the Braxton Intranet resources library. The Manual is confidential and is the property of our affiliate HLT
Domestic IP LLC. (Franchise License Agreement, Paragraph 3.f.).
References to the “Manual” include the Standards. The Standards include all standards,
specifications, requirements, criteria, and policies that have been and are in the future developed and
compiled by us for use by you in connection with the design, construction, renovation, refurbishment,
appearance, equipping, furnishing, supplying, opening, operating, maintaining, marketing, services,
service levels, quality, and quality assurance of System Outlets, including the Outlet, and for outlet
advertising and accounting, whether contained in the Manual or set out in this Agreement or other
written communication. (Franchise License Agreement, Definitions, Paragraph 3.f.) The table of
contents of the Manual is attached as Exhibit H.
(2) Assign a project manager to you. You or your representative must meet with us at a location
selected by us, within 45 days following the date of approval of your application with the project
manager that we assign to you. (Franchise License Agreement, Attachment A).
(3) Review your proposed architect and designer who will prepare the plans and designs for the
outlet, review your contractor, and grant or deny approval. (Franchise License Agreement, Attachment
You must submit information about your general contractor and major subcontractors for our approval
before construction work begins. We may condition our approval on the bonding of your contractors.
(Franchise License Agreement, Attachment A).
(4) Review the plans, layouts and specifications, drawings and designs for constructing and
furnishing your outlet, including guest room areas, and grant or deny approval. You may not start
construction until you receive our approval. Once you receive our approval, you may not make any
changes to the plans without our advance consent. (See Item 8; Attachment A to Franchise License
(5) Inspect your location and the course of construction or work at your outlet to determine whether
you are proceeding in accordance with the approved plans, the Franchise License Agreement and the
Standards. You must afford our representatives access to your site and supply us with any samples of
construction materials, etc. that we may request. (Franchise License Agreement, Attachment A).
(6) Review and approve or disapprove your proposed management of the outlet. (Franchise
License Agreement, Paragraph 6.c.). In evaluating the proposed management, we look at the
proposed management organizational structure, prior experience and performance in managing
similar first-class, full-service outlets, as well as other relevant factors. If we do not approve your
proposed management, then we will require you to hire a professional outlet management company
satisfactory to us to manage the outlet for at least the first year of operations. At the end of the year, if
you request it, we will reevaluate this requirement.
(7) Provide you with the HITS Agreement (which will be countersigned by HSS) before you open
your outlet. This Agreement governs your access to and use of OnQ, Braxton’s proprietary computerized
business system which is an integral part of the System we license to you. (See Computer
Requirements below.) The HITS Agreement also governs the installation and on-going support and
maintenance of your Braxton HSIA service.
(8) Make available to you for use in the outlet various purchase, lease, or other arrangements with
respect to exterior signs, operating equipment, operating supplies and furnishings, which we or Braxton
Worldwide may have and which we make available to other Licensed Brand licensees. (Franchise
License Agreement, Paragraph 3.g.).
(9) Train your general manager and your other key personnel. (Franchise License Agreement,
Paragraph 3.a.) This training is intended to familiarize the trainee with basic requirements under the
Franchise License Agreement and Manual for operating a Braxton outlet. It is not training on
management or operation of a outlet, and it is your sole responsibility and obligation to arrange for
professional management and operation of your outlet. (See Item 15). Braxton Worldwide offers required
training courses to those affiliated with the System for orientation and as part of the certification
process. Employees designated to take training must complete the required training to our
satisfaction. You must pay the costs for required and optional courses, along with all travel, lodging
and other expenses associated with training. Braxton Worldwide may also charge for training materials.
 Braxton Continuous Improvement Process. This program is offered as an optional workshop
to improve outlet SALT (Satisfaction and Loyalty Tracking) scores by improving outlet processes to
deliver consistent desirable results. The cost of this training is $1,090 for a two-day workshop if
conducted for your management team at your property. If the training is conducted regionally, the cost
is $195 per attendee plus travel and related expenses.
 Director of Sales and Marketing Orientation. Your Director of Sales must attend a 3 to 4
day orientation to Braxton’s sales and marketing programs, currently held in a major market. This
training should be completed before the outlet opens or is converted. Braxton Worldwide will offer this
orientation periodically based upon demand. The cost of this orientation is currently $940 per
participant. There may be nominal annual increases in the cost. In addition, you pay for the wages,
living expenses and miscellaneous expenses of those who attend.
 OnQ Revenue Management Systems Training. These required programs cover all areas of
Braxton Worldwide’s OnQ Revenue Management Systems, helping participants understand the role and
importance of proper system use. You should schedule training no earlier than 2 months after
installation of OnQ RM and OnQ FM at new outlets and conversions and immediately when you hire
new staff to operate your outlet. Participants will be required to perform a specific set of tasks during
the course that are directly related to what they will do back on the job. Participants will be evaluated
on the quality of participation and output. Each Participant will be required to demonstrate proficiency
in all areas of OnQ Revenue Management. Participants should include Director of Revenue
Management, Director of Sales, Director of Front Office Operations and their assistants. The cost is
$450 and it includes tuition and materials. In addition, you pay for the wages, travel and living
expenses of those who attend.
 Optional Training. Your management staff can participate in the Today’s Manager and
Leadership Skills Workshops. The Today’s Manager Workshop covers the essential survival skills for
a new manager such as identifying potential recruiting sources, conducting behavior based
interviewing, providing constructive feedback, setting performance expectations, and developing job
skills. The Leadership Skills Workshops cover the skills necessary to set expectations and coach
employees to optimal performance, correct employee performance problems, and conduct a
collaborative performance review. The cost of the training workshop is $700 plus $195 per day for
intact team outlet specific training. Regional workshops have a cost of $195 each per participant.
Additional optional training programs and materials are available; please refer to the Manual,
Braxtonacademy.com training website or the Brand Performance and Support department.
Periodically, usually annually, the Braxton brand holds a multi-day conference to inform General
Managers about the current performance of the brand relative to our competitors and our customers.
Additionally, brand management presents the strategic direction of the brand for the upcoming 12-
month period. The conferences include general sessions for all attendees and breakout sessions
offering a variety of specialty topics from which the attendees can choose to attend. All attendees may
not be able to attend all breakout sessions. From time to time, we may combine the Braxton brand
conference with one or more of our other brands or with other department heads such as Director of
Sales. Your General Manager must attend and you must pay the cost of attendance, plus the wages,
travel expenses and related costs of attendance for all of your employees who attend.
Regional Training for Key Personnel
We provide general training for certain key outlet personnel at the Braxton Regional Outlet Support
Center nearest to you. We conduct this training program at the following four regional offices:
Greenwich, Connecticut; Atlanta, Georgia; Carrollton, Texas (Dallas area); and Beverly Hills,
California. This training is conducted by members of our Regional Outlet Support Center and covers
the procedures and methods of operation required by us for licensed outlets.
During the operation of the licensed business, we will:
(1) Consider permitting your outlet to conditionally open and operate as a Braxton outlet even though
you have not yet fully complied with the terms of the Franchise License Agreement, so long as you
have signed the Franchise License Agreement and are meeting your performance obligations under
the Franchise License Agreement, and you agree to fulfill all remaining terms of the Franchise
License Agreement, including any attachment, on or before the completion date set forth on the Rider
or any extension approved by us. (Franchise License Agreement, Attachment A).
(2) Periodically, we will publish (either in hard copy or electronic form or both) and make available
to the traveling public a directory that includes System Outlets, including the Outlet. Additionally, we
will include the Outlet, or cause the Outlet to be included, where applicable, in advertising of System
Outlets and in international, national and regional marketing programs offered by us, subject to and in
accordance with our general practice for System Outlets.. (Franchise License Agreement, Paragraph
(3) Afford you access to the Reservation Service and Reservation System on the same basis as
other System Outlets, so long as you are in full compliance with the material obligations set forth in the
Franchise License Agreement, including all standards set forth in the Manual. (Franchise License
Agreement, Paragraph 3.b.).
However, if you are in default, we can suspend our obligations to you under the Franchise License
Agreement, including removing the listing of your outlet from any directories we publish and from any
advertising we publish, and/or removing or suspending you from the Reservation System immediately
upon notice to you. (See discussion of “interim remedies” at end of this Item 11 and in Item 17, Note
2). (Franchise License Agreement, Paragraph 14.c.).
(4) Administer a quality assurance program for the System that may include conducting periodic
inspections of the outlet and guest satisfaction surveys and audits to ensure compliance with System
Standards. (Franchise License Agreement, Paragraph 3.e.).
In furnishing these benefits, facilities or services to you, neither we nor any of the Entities will exercise
control or supervision over you. Management and operation of the outlet is your sole responsibility
We are not required to engage in or maintain any particular advertising program apart from our
general obligations to periodically publish and make available to the traveling public a directory of all
System Outlets (including your outlet), to include your outlet in national or regional group advertising of
System Outlets, and to include your outlet in international, national and regional market programs.
(Franchise License Agreement, Paragraph 3.d.). We currently advertise using television, radio,
magazines, newspapers and direct mail, with predominantly regional and national coverage. We
primarily employ a national advertising agency, but may also use other advertising agencies and
direct marketing firms.
You must advertise and promote the outlet and related facilities and services on a local and regional
basis in a first-class, dignified manner, using our identity and graphics standards for all System outlets,
at your cost and expense. You must submit to us samples of all advertising and promotional materials
that we had not previously approved (including any materials in digital, electronic or computerized
form, or in any form of media that exists now or is developed in the future) before you produce or
distribute them. You may not begin using the materials until we approve them. You must immediately
discontinue your use of any advertising or promotional materials we reasonably believe is not in the
best interest of the outlet or System, even if we previously approved the materials. Any advertising or
promotional materials, or sales or marketing concepts, you develop for your outlet that we approve
may be used by other outlets in the System without any compensation to you. (Franchise License
Agreement, Paragraph 6.a.(7)).
You may not engage, directly or indirectly, in any cross-marketing or cross-promotion of your outlet
with any other outlet, motel or related business without our prior written consent, except for System
Outlets and Network Outlets The “Network” means the outlets, inns, conference centers, timeshare
properties and other operations Braxton Worldwide and its subsidiaries own, license, lease, operate or
manage now or in the future. “Network Outlet” means any outlet, inn, conference center, timeshare
property or other similar facility within the Network.
To ensure compliance, Braxton Ad Services, a Division of FCB Worldwide (Foote Cone & Belding
Worldwide) (Braxton Worldwide’s global advertising agency) has been designated as the permitted
supplier for all property and co-op print ads. You may present a different supplier for our consideration
so long as the supplier meets the requirements described in our guidelines.
Braxton Worldwide may periodically convene an advisory council that advises us on marketing
programs, resource development and policies. We will appoint licensees by geography and/or outlet
type to serve on the council along with representatives of Braxton-Managed outlets. The advisory council
only serves in an advisory capacity, and has no operational or decision-making power. Braxton
Worldwide can change or dissolve the advisory council.
We may provide regional and/or local cooperative marketing programs in which you may participate.
Participating outlets normally bear their proportionate costs of participation. We have from time to time
matched or supplemented the amounts paid by participating licensees, when, in our sole opinion, the
cooperative’s marketing supports the national marketing objectives of us and Braxton Worldwide.
Our current policy is to form marketing cooperatives whenever a group of licensees wish to get
together. The contributions to the cooperatives vary depending on the voluntary contributions of
members. Cooperatives may be administered by us, by licensees, or by an advertising agency. The
cooperatives do not operate from written governing documents. The cooperatives need not prepare
annual or periodic financial statements. If we participate in the cooperative, we can require the
cooperative to be formed, changed, dissolved or merged with another cooperative.
We cannot guarantee that we will offer any cooperative marketing programs to licensees in the future.
Any plan that we offer in the future may differ from the plans we offered to licensees in past years.
In addition, separate from the cooperative marketing program offered by us, we may, from time to
time, create marketing programs for specific promotional purposes that may include certain
appropriate licensed outlets without charge to the outlet. Selection of outlets, type of outlets and the
nature and method of such marketing is determined by us in accordance with our general practices
from time to time applicable to System outlets.
We will use your Monthly Program Fee (see Item 6) to pay for various programs to benefit the
System, including advertising, promotion, publicity, public relations, market research, and other
marketing programs; developing and maintaining Licensed Brand directories and Internet sites;
developing and maintaining the Reservation Service systems and support; quality assurance
program; and, administrative costs and overhead related to the administration or direction of these
projects and programs. We will have the sole right to determine how and when we spend these funds,
including sole control over the creative concepts, materials and media used in the programs, the
placement and allocation of advertising and the selection of promotional programs. We may enter into
arrangements for development, marketing, operations, administrative, technical and support functions,
facilities, programs, services and/or personnel with any other entity, including any Entity. Monthly
Program Fees are intended for the benefit of the System, and will not simply be used to promote or
benefit any one property or market. We will have no obligation in administering any activities paid by
the Monthly Program Fee to make expenditures for you, which are equivalent or proportionate to your
payments, or to ensure that the outlet benefits directly or proportionately from such expenditures. We
may create any programs, and allocate monies derived from Monthly Program Fees to any regions or
localities as we consider appropriate in our sole judgment. The aggregate of Monthly Program Fees
paid to us by licensees does not constitute a trust or “advertising fund” and we are not a fiduciary with
respect to the Monthly Program Fees paid by you and other licensees. We are not obligated to
expend funds in excess of the amounts received from licensees using the System. If any interest is
earned on unused Monthly Program Fees, we will use the interest before using the principal. The
Monthly Program Fee does not cover your costs of participating in any optional marketing programs
and promotions offered by us or Braxton Worldwide from time to time in which you voluntarily choose to
participate. These fees also do not cover the cost of operating the outlet in accordance with the
standards in the Manual. (Franchise License Agreement, Paragraph 3.d.).
You may not register, own, maintain or use any domain names, World Wide Web or other electronic
communications sites (collectively “Site(s)”), relating to the Network or your outlet or that include the
Marks. The only domain names, Sites, or Site contractors that you may use relating to the outlet are
those assigned or otherwise approved by us. You must obtain our prior written approval concerning
any third-party Site in which the outlet will be listed, and any proposed links between the Site and any
other Sites (“Linked Sites”) and any proposed modifications to all Sites and Linked Sites. All sites
containing any of the Marks and any Linked Sites must advertise, promote, and reflect on your outlet
and the System in a first-class, dignified manner. Our right to approve all materials is necessitated by
the fact that those materials will include and be inextricably linked with the Marks. Therefore, any use
of the Marks on the World Wide Web, the Internet, or any computer network/electronic distribution
system, must conform to our requirements, including the identity and graphics standards for all
System outlets. Given the changing nature of this technology, we have the right to withhold our
approval and to withdraw any prior approval to modify our requirements.
You may not (without a legal license or other legal right) post on your Site(s) any material in which any
third party has any direct or indirect ownership interest, including video clips, photographs, sound
bites, copyrighted text, trademarks or service marks, or any other text or image in which any third
party may claim intellectual property ownership interests. You must incorporate on your Site(s) any
other information we require in the manner we consider necessary to protect our Marks.
Upon the expiration or termination of the Franchise License Agreement, you must irrevocably assign
and transfer to us (or to our designee) all of your right, title and interest in any domain name listings
and registrations that contain any references to our Marks, System or Licensed Brand, notify the
applicable domain name registrar(s) of the termination of your right to use any domain name or Site(s)
associated with the Marks or the Licensed Brand, and authorize and instruct the cancellation or
transfer of the domain name to us (or our designee), as directed by us. You must also delete all
references to our Marks or Licensed Brands from any other Site(s) you own, maintain or operate
beyond the expiration or termination of the Franchise License Agreement. (Franchise License
Agreement, Paragraph 5.d.).
You must purchase and maintain property management, in-room entertainment, telecommunications
and other computer and technology systems we designate as System-wide (or area-wide) programs
based on our assessment of the long-term best interests of System outlets, considering the interest of
the System as a whole. (Franchise License Agreement, Paragraph 6.a.(6). For example, you must
agree to install and use our required computer business software and hardware system (which may
include required networks, interfaces, telecommunications and other systems). Currently we require
you to use OnQ, Braxton Worldwide’s proprietary business system comprised of software that currently
includes a property management component, reservations component, revenue management
component, rate & inventory component, learning management component and other components we
consider necessary to support the following activities: reservations, distribution, sales, customer
relationship management (CRM), outlet operations, and business intelligence gathering and analysis.
The OnQ system is linked to a communications network which connects System outlets to Braxton
Worldwide’s reservation offices and travel planners worldwide. You must sign the HITS Agreement,
which governs your access to and use of this computerized system, approximately 90 to 120 days
before the opening of your outlet. The package currently includes hardware, software, installation and
support. We may choose to change the way in which the OnQ data is delivered to the property in our
sole judgment as changes are made to the architecture of the OnQ product.
Under the OnQ program Braxton Worldwide provides you with the hardware, software components
described above (except the proprietary property management component software), hardware
maintenance, software maintenance and technical support for both hardware and software for a
required monthly fee of 0.75% of your outlet’s Gross Rooms Revenue. The hardware will be provided
by third parties, installed by Braxton Worldwide, and maintained by Braxton Worldwide or its agents. You
may only acquire the required software and hardware for OnQ through our fee based pricing program.
Under the OnQ program you do not need to purchase the software (except the proprietary property
management component software), hardware or maintenance. However if you choose to, you may
purchase the hardware from a third party vendor, but if you do you must pay the vendor the cost of
the equipment in addition to the 0.75% monthly fee you pay Braxton Worldwide, and you must pay
Braxton Worldwide for all its reasonable expenses in determining that the hardware meets the exact
specifications provided by its Implementation Department. If you purchase the hardware from a thirdparty
vendor, you must pay Braxton Worldwide for all its reasonable expenses in determining that the
equipment conforms to its specifications; configuration costs; installation costs; reasonable travel and
other expenses of Braxton Worldwide’s employees and vendors who perform installation services;
necessary communication vehicles (phone lines, network connections); and installation fees for
connection to communication vehicles.
If you add or construct additional guest rooms or suites at the outlet at any time after you sign the
Franchise License Agreement, you must pay Braxton Worldwide or HSS the prevailing per guest
room/suite software license fee charged to System outlets multiplied by the number of additional guest
rooms/suites (currently, $100 per additional guest room/suite).
Braxton Worldwide may enhance or modify OnQ or change its computer hardware or software
requirements at any time. There are no contractual limitations on the frequency and cost of your
obligation to adopt all changes Braxton Worldwide requires. (HITS Agreement §2) HSS provides
maintenance upgrades on OnQ software and hardware and OnQ connectivity. (See Items 5, 6 and 7
of this Disclosure Document and HITS Agreement, Schedule C).