How is the annual rent calculated for the Atwell Suites dispensing equipment?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
All equipment leased to Customer will be leased at an annual rate calculated by multiplying the total installed cost of equipment by the then-current lease factor, plus all applicable sales and use taxes, if any, as rent for the Equipment.
Rent will be due monthly.
At Company's discretion, Company may utilize funds due Customer to offset amounts due Company under this Lease.
In any state where a lease without any additional charge is not permitted (e.g., in Wisconsin) or Customer elects to lease additional Dispensers, such Dispensers will be leased to Customer at an annual lease rate calculated by multiplying the total installed cost of the additional Dispensers by the then-current lease factor. The lease factor currently in effect for Dispensers is 0.24. Should the lease factor change during the Term, any Dispenser installed after the change goes into effect will be subject to the new lease factor. For the avoidance of doubt, if the ownership and/or management of a Hotel changes, the then-current lease factor will remain in effect for that Hotel. Charges will be invoiced. Any unpaid invoices will be handled as follows (the "Unpaid Invoice Procedure"): All unpaid invoices by a Hotel will be subject to Company's payment/credit terms and conditions applicable to such Hotel. Furthermore, Company may refuse to deliver further any Company Beverages to the affected Hotel until the unpaid invoice is satisfied.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites Franchise Disclosure Document, the annual rent for dispensing equipment is calculated by multiplying the total installed cost of the equipment by the then-current lease factor, and then adding any applicable sales and use taxes. The rent is due monthly. Atwell Suites may use funds due to the franchisee to offset amounts owed to Atwell Suites under the lease. The current lease factor for dispensers is 0.24. If the lease factor changes during the term, any dispenser installed after the change will be subject to the new lease factor. If the ownership or management of a hotel changes, the then-current lease factor will remain in effect for that hotel.
This means that the cost of leasing the dispensing equipment will depend on the initial cost of the equipment and the prevailing lease factor at the time of installation. The 0.24 lease factor essentially adds 24% of the equipment's installed cost as the annual lease payment. For example, if the installed cost of the equipment is $1,000, the annual lease payment would be $240, plus any applicable taxes, which is then divided into monthly installments.
This arrangement ensures that Atwell Suites retains ownership of the dispensing equipment while allowing franchisees to use it for their beverage service. The provision for Atwell Suites to offset funds due to the franchisee with lease payments provides a mechanism for managing payments. The stability of the lease factor despite changes in hotel ownership or management offers some financial predictability for franchisees. However, franchisees should be aware that the lease factor can change during the term of the agreement, potentially affecting the cost of newly installed equipment.