As of December 31, 2024, how many outstanding performance guarantees did Atwell Suites have?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
fined benefit plans' assets, preferred equity investments and the marketable securities and related liabilities of the Company's Rabbi Trust.
Notes to Consolidated Financial Statements (continued)
14. Fair Value Measurements (continued)
The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and 2023 (in thousands):
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Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, as of December 31, 2024, the company had two outstanding performance guarantees. These guarantees are granted to encourage property owners to enter into a management agreement with Atwell Suites. The maximum exposure under these guarantees was $11.0 million as of the same date.
These performance guarantees mean that Atwell Suites is obligated to pay out amounts if certain performance hurdles, defined in the management agreements, are not met. These hurdles relate to the performance of the properties under Atwell Suites' management. The guarantees were provided by wholly-owned subsidiaries of the company.
Prospective franchisees should understand that these guarantees represent a potential financial risk for Atwell Suites. If the properties do not perform as expected, Atwell Suites could be required to pay out significant amounts under these guarantees, impacting the company's financial stability. Franchisees may want to inquire about the specific performance metrics that trigger these guarantees and the historical performance of properties under similar agreements to assess the potential risk.