What is the 'Franchise Agreement' referenced in the Americas Best Value Inn franchisee release document?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon each renewal, we reserve the right to require you to sign our then-current form of franchise agreement, and to require you and your owners to execute and deliver to us a general release, in a form satisfactory to us, of any and all claims against us and our owners, officers, directors, employees, agents, successors and assigns.
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- New Franchise Agreement.
Assignee shall, concurrently with the execution of this Agreement, execute our current form of franchise agreement and related agreements (to reflect that the agreement is executed in connection with a transfer of the rights under the Existing Franchise Agreement) (the "New Franchise Agreement"), and Assignee Owner[s] shall execute the Guaranty and Assumption of Obligations attached thereto.
The New Franchise Agreement will govern Assignee's ownership and operation of the Hotel from and after the Closing Date.
If the Transfer is not consummated on or prior to the Outside Date, and we terminate this Agreement and withdraw our consent to the Transfer, then Assignee acknowledges and agrees that the New Franchise Agreement becomes null and void.
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to Americas Best Value Inn's 2025 Franchise Disclosure Document, the 'Franchise Agreement' is referenced within the context of franchise renewals and transfers. Specifically, upon renewal of the initial franchise term, Americas Best Value Inn reserves the right to require franchisees to sign the then-current form of the franchise agreement. Additionally, franchisees and their owners may be required to execute and deliver a general release of claims against Americas Best Value Inn. The initial term of the agreement commences on the effective date and expires five years from the opening date.
In the event of a transfer of franchise rights, the assignee (the party receiving the franchise) is required to execute Americas Best Value Inn's current form of franchise agreement, referred to as the 'New Franchise Agreement.' This agreement governs the assignee's ownership and operation of the hotel after the transfer is completed. If the transfer is not completed and Americas Best Value Inn withdraws consent, the 'New Franchise Agreement' becomes null and void.
For prospective franchisees, it's crucial to understand that the terms of the franchise agreement can change upon renewal, and a general release of claims may be required. Furthermore, anyone considering purchasing an existing Americas Best Value Inn franchise should be aware that they will be required to sign a new franchise agreement with the then-current terms, which may differ from the terms of the original agreement.