What is included in the calculation of 'Lost Revenue Damages' for an Americas Best Value Inn franchise?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) Lost Revenue Damages
- (i) If we terminate this Agreement pursuant to Sections 13.(b) or 13.(c), or you terminate this Agreement without cause, you will pay us a lump-sum payment equal to the Royalties, Brand Promotion Fees, Conference Fees, Revenue Management Insights Fees, Operations Insights Fees, and PMS-to-CRS Enhanced Connectivity Fees payable for the period from the termination date through the lesser of 36 months or the balance of the current Term ("Lost Revenue Damages").
This is not a penalty, but a bona fide estimate of our liquidated damages arising from such early termination.
You and we agree that the calculation described in this Section is a calculation only of the damages that we would suffer due to the loss or interruption of the revenue stream we would have derived from your continued payment of Royalties, Brand Promotion Fees, Conference Fees, Revenue Management Insights Fees, Operations Insights Fees and PMS-to-CRS Enhanced Connectivity Fees, and that nothing herein shall preclude or limit us from proving and recovering any other damages caused by your breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 71–223)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn Franchise Disclosure Document, 'Lost Revenue Damages' are calculated based on several fees that the franchisee would have paid from the termination date through the remaining term of the agreement, up to a maximum of 36 months. These fees include Royalties, Brand Promotion Fees, Conference Fees, Revenue Management Insights Fees, Operations Insights Fees, and PMS-to-CRS Enhanced Connectivity Fees.
This calculation is not considered a penalty but rather a good-faith estimate of the damages Americas Best Value Inn would incur due to the early termination of the franchise agreement. The FDD specifies that this calculation only accounts for the loss of revenue from the franchisee's payments of the listed fees.
The document also clarifies that Americas Best Value Inn retains the right to pursue additional damages beyond the 'Lost Revenue Damages' if they can prove other losses resulting from the franchisee's breach of the agreement. Furthermore, the franchisee's obligation to pay 'Lost Revenue Damages' is in addition to any other outstanding amounts owed to Americas Best Value Inn up to the termination date, including payments due under annual or multi-year commitments and any unpaid start-up or connectivity fees.
Prospective franchisees should understand that terminating the agreement early, whether by Americas Best Value Inn due to the franchisee's breach or by the franchisee without cause, can result in significant financial obligations beyond the ongoing fees. It is also important to note that Americas Best Value Inn's legal remedies under the agreement do not prevent them from seeking equitable remedies under applicable law.