What constitutes a binding Approval from Americas Best Value Inn?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
- (vi) If you are an Entity, the Principal and the Management Company, if applicable with respect to the Management Company, are authorized, on your behalf, to deal with us in respect of all matters whatsoever which may arise in respect of this Agreement. Any decision made by the Principal or the Management Company will be final and binding upon you, and we will be entitled to rely solely upon the decision of the Principal or Management Company in any such dealings without the necessity of any discussions with any other party named in this Agreement, and we will not be held liable for any actions taken by you, based upon any decision or actions of the Principal or Management Company; and
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn FDD, any decision made by the Principal or the Management Company of an Entity is considered final and binding on the franchisee, without requiring further discussion with any other party named in the agreement. Americas Best Value Inn is entitled to rely solely on these decisions. This applies to all matters arising from the franchise agreement.
This means that if a franchisee operates under an Entity structure (like an LLC or corporation), the individual designated as the Principal, or the appointed Management Company, has the authority to make decisions that legally bind the entire franchise operation. Americas Best Value Inn will not be held liable for actions taken by the franchisee based on these decisions. This is significant because it streamlines communication and decision-making, allowing Americas Best Value Inn to deal directly with a single point of contact.
However, this also places a considerable responsibility on the Principal or Management Company, as their decisions carry significant weight. Franchisees need to carefully consider who they designate as the Principal or choose as their Management Company, ensuring that these parties are well-informed and capable of making sound business judgments. It is also important for the franchisee to have internal agreements and controls to ensure that the Principal or Management Company acts in the best interests of the franchise.
This arrangement is not uncommon in franchising, particularly when dealing with larger or more complex franchise operations. It allows the franchisor to avoid getting bogged down in internal disputes or disagreements within the franchisee's organization, and ensures that there is a clear line of authority for decision-making purposes.