Who determines how partial payments are applied under the Note for Americas Best Value Inn?

According to the 2025 Franchise Disclosure Document, the "Holder" of the Note for Americas Best Value Inn has the sole discretion to determine how partial payments are applied. This means that any partial payments made under the Note can be applied to cover interest, the principal amount, or any costs associated with the Note, based on the Holder's decision. The term "Holder" includes any subsequent holder of or participant in the Note, meaning this right extends even if the Note is assigned to another party.

This provision gives significant power to the Holder, as they can choose how to allocate partial payments in a way that best suits their interests. For example, they could apply the payments primarily to costs or interest, which might leave the principal amount largely untouched. This could extend the repayment period and increase the overall amount the franchisee pays over time.

For a prospective Americas Best Value Inn franchisee, this implies a need for careful financial planning and diligent payment management. Franchisees should strive to make full and timely payments to avoid partial payment scenarios where the Holder's discretion could work against their financial interests. Understanding the terms of the Note and maintaining open communication with the Holder can help mitigate potential risks associated with this provision. Franchisees should seek clarification on the Holder's typical practices for applying partial payments to better anticipate and manage their financial obligations.