Can the Holder specify additional defaults under the Agreement for Americas Best Value Inn?

According to the 2025 Americas Best Value Inn Franchise Disclosure Document, the 'Holder' (likely referring to a lender or financial institution) retains certain rights regarding the franchise agreement and associated notes. Specifically, the Holder has the right to specify additional defaults beyond those initially outlined in the agreement. This means that if a franchisee fails to meet certain financial or operational benchmarks set by the Holder, it could trigger a default under the agreement.

This provision is significant for prospective Americas Best Value Inn franchisees because it highlights the potential for external financial entities to influence the terms of the franchise agreement. While the initial agreement between the franchisee and Americas Best Value Inn may define certain default conditions, the Holder has the power to add to these, potentially creating a stricter set of requirements for the franchisee to meet. This could increase the risk of default if the franchisee's financial situation becomes precarious.

It is important for prospective franchisees to carefully review all agreements related to financing, including any notes or agreements involving a Holder, to fully understand the potential default conditions. Franchisees should seek legal counsel to clarify the implications of the Holder's right to specify additional defaults and how this might impact their obligations under the franchise agreement. Understanding these terms is crucial for managing risk and ensuring the long-term success of the Americas Best Value Inn franchise.