What must the business interruption insurance policy for an Atwell Suites franchise ensure regarding royalties, Services Contributions, and other sums payable to IHG?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- (7) Licensee will ensure the royalties, Services Contributions and any other sums payable to IHG are insured within the Licensee's business interruption insurance policy. The policy should insure against 'all risks' of physical loss or damage, and be endorsed to provide for payments to be made directly to IHG.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, franchisees are required to maintain a business interruption insurance policy that covers royalties, Services Contributions, and any other sums payable to IHG. This insurance policy must protect against all risks of physical loss or damage.
Furthermore, the policy must be endorsed to allow for direct payments to be made to IHG. This stipulation ensures that in the event of a business interruption that affects the franchisee's ability to operate and generate revenue, IHG will still receive the royalties, service contributions, and other payments due to them under the franchise agreement.
This requirement is designed to protect IHG's financial interests by ensuring a continuous revenue stream even when an Atwell Suites location experiences operational disruptions due to unforeseen circumstances. Franchisees need to factor in the cost of this specific insurance coverage when evaluating the overall financial investment required to start and operate an Atwell Suites franchise.