What is Americas Best Value Inn's requirement for the management agreement between the franchisee and the Management Company?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
You may engage a management company (the "Management Company") that we approve to manage the direct operation of your Hotel. The management agreement or other agreement between you and the Management Company will be subject to our prior written approval. Prior to opening your Hotel or within 90 days of activating your Hotel in our system, one of your Hotel Representative(s) must successfully complete our training program. Whether you are an individual, corporation, limited liability company, partnership or other entity, you are at all times responsible for the management, direction and control of your Hotel, regardless of whether you retain a Management Company. If you are a legal entity, your "Principal" must have at least a 25% ownership interest and voting power in you and must have the authority of a chief executive officer. If you hire a Management Company, it will not be required to have an equity interest in you.
If you hire a Management Company, we require the Management Company to execute the Management Company Joinder to the Franchise Agreement, whereby the Management Company agrees that it is bound by all of the terms of the Franchise Agreement and agrees that it is jointly and severally liable with you for all your obligations under the Franchise Agreement, except with respect to the actual payments of any amounts due to any third parties, our affiliates or pursuant to the Franchise Agreement. The Management Company must have the authority to act on your behalf and deal with us in all matters that may arise under the Franchise Agreement, and we will be entitled to rely solely upon a decision of the Management Company. In the case of any conflict between the Franchise Agreement and any management agreement between you and the Management Company, the Franchise Agreement will prevail.
Source: Item 15 — **OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn FDD, if a franchisee chooses not to personally manage their hotel, they have the option to engage a management company. However, this management agreement is subject to specific requirements and approvals from Americas Best Value Inn.
Specifically, the management agreement between the franchisee and the Management Company requires Americas Best Value Inn's prior written approval. Furthermore, if a management company is hired, Americas Best Value Inn requires the Management Company to execute a Management Company Joinder to the Franchise Agreement. By signing this joinder, the Management Company agrees to be bound by all the terms of the Franchise Agreement. The Management Company also agrees that it is jointly and severally liable with the franchisee for all obligations under the Franchise Agreement, except for the actual payments of any amounts due to any third parties, affiliates, or pursuant to the Franchise Agreement.
Additionally, the Management Company must have the authority to act on the franchisee's behalf and deal with Americas Best Value Inn in all matters that may arise under the Franchise Agreement. Americas Best Value Inn is entitled to rely solely upon a decision of the Management Company. In the case of any conflict between the Franchise Agreement and any management agreement between the franchisee and the Management Company, the Franchise Agreement will prevail.