Is the dispensing equipment considered personal property under the Atwell Suites lease agreement?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- TITLE TO THE EQUIPMENT. Title to the Equipment is, and will at all times remain, vested in Company. Equipment Lessee will have no right, title, or interest in or to the Equipment, except the right to quiet use of the Equipment in the ordinary course of its business as provided in this Lease. Equipment Lessee will execute such title documents, financing statements, fixture filings, certificates and such other instruments and documents as Company will reasonably request to ensure to Company's satisfaction the protection of Company's title to the Equipment and Company's interests and benefits under this Lease. Equipment Lessee will not transfer, pledge, lease, sell, hypothecate, mortgage, assign or in any other way encumber or dispose of any of the Equipment. THE PARTIES AGREE. AND EQUIPMENT LESSEE WARRANTS, THAT THE EQUIPMENT IS, AND WILL AT ALL TIMES REMAIN, PERSONAL PROPERTY OF COMPANY NOTWITHSTANDING THAT THE EQUIPMENT OR ANY PART THEREOF MAY NOW BE, OR HEREAFTER BECOME, IN ANY MANNER AFFIXED OR ATTACHED TO, OR EMBEDDED IN, OR PERMANENTLY RESTING UPON, REAL PROPERTY OR IMPROVEMENTS ON REAL PROPERTY. Equipment Lessee will not make any alterations, additions, or improvements to the Equipment without the prior written consent of Company. All parts added to the Equipment through alterations, repairs, additions or improvements will constitute accessions to, and will be considered an item of the Equipment and title to such will immediately vest in Company. Equipment Lessee agrees that Company may transfer or assign all or any part of Company's right, title and interest in or to any Equipment (in whole or in part) and this Lease, and any amounts due or to become due, to any third party ("Assignee") for any reason. Upon receipt of written notice from Company of such assignment, Equipment Lessee will perform all its obligations with respect to any such Equipment or the benefit of the applicable Assignee and, if so di
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, the dispensing equipment provided under the lease agreement is explicitly considered the personal property of the company, regardless of its attachment to real property. The agreement states that the Equipment Lessee (the PSH Owner of each Corporate Hotel) has no ownership rights to the equipment, only the right to use it. This is outlined in Exhibit D, which governs the dispensing equipment lease.
This designation as personal property is crucial because it protects the company's ownership of the equipment. Even if the equipment becomes affixed to the real estate, it does not become part of the property. The franchisee (Equipment Lessee) warrants that the equipment remains the company's personal property at all times. To further protect the company's title, the franchisee must execute any documents, such as financing statements or fixture filings, reasonably requested by the company.
This arrangement has several implications for a prospective Atwell Suites franchisee. First, the franchisee cannot sell, transfer, or encumber the dispensing equipment in any way. Second, any alterations or improvements made to the equipment become the property of the company. Finally, the company can transfer or assign its rights to the equipment and the lease to a third party, and the franchisee must then fulfill its obligations to that third party. This ensures that Atwell Suites retains full control and ownership of the dispensing equipment throughout the term of the lease.