What is the definition of 'Term' in the Americas Best Value Inn franchise agreement?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Service Mark Designation. Subject to the license granted in this Agreement, you will operate the Hotel located at the Premises under the Americas Best Value Inn brand (the "Brand") indicated on Exhibit A.
2. Term.
- (a) Initial Term. The term of this Agreement (the "Term") commences on the Effective Date and expires five (5) years from the Opening Date (as defined in Section 8.(b)), subject to earlier termination as set forth in this Agreement.
- (b) Renewal. The Term will be automatically extended for up to three additional five-year terms (and each extension is included in the definition of Term), if:
- (i) neither you nor we have provided at least 90 days prior written notice of an intention not to renew the Term prior to the end of the then-current term;
- (ii) you are not in default of any provision of this Agreement, any other agreement between you and us or our affiliates, or any supplier or vendor;
- (iii) you have completed (at least 60 days before the scheduled expiration of the Term) all maintenance, refurbishing, renovating, and upgrading of the Hotel required to conform the Hotel to (a) the Brand Standards (defined in Section 8.(d)) then in effect for new Brand Franchisees (defined in Section 3.(a)), and (b) any applicable PIP (as defined in Section 4.(b));
- (iv) you are lawfully entitled to continue to use and occupy the Premises for the entire following successor term; and
- (v) you have not received four (4) or more default notices from us during the Term; and
- (vi) you pay to us a renewal fee of $5,000.
Upon each renew
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn Franchise Disclosure Document, the 'Term' refers to the duration of the franchise agreement. The initial term starts on the effective date and lasts for five years from the hotel's opening date, unless the agreement is terminated earlier.
The agreement can be automatically extended for up to three additional five-year terms, provided certain conditions are met. These conditions include neither party providing written notice of non-renewal at least 90 days before the current term expires, the franchisee not being in default of any agreements, completion of required hotel maintenance and upgrades to meet brand standards for new franchisees, legal entitlement to occupy the premises for the extended term, receiving no more than three default notices during the current term, and payment of a $5,000 renewal fee.
Americas Best Value Inn reserves the right to require franchisees to sign the then-current franchise agreement and provide a general release of claims upon each renewal. This means that the terms of the franchise agreement could change at each renewal, potentially impacting the franchisee's obligations and rights. Franchisees should carefully consider these renewal conditions and the potential for changes to the franchise agreement before deciding to renew their franchise.