In the Atwell Suites franchise agreement, does the illegality or unenforceability of one provision affect the enforceability of the remaining provisions?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
language: "Enforceability of this provision is a matter governed by Federal Bankruptcy Law and enforceability or nonenforceability is subject to that law and rulings of a court of competent jurisdiction."
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- Any provision in the License which designates jurisdiction or venue or requires the Licensee to agree to jurisdiction or venue, in a forum outside of North Dakota, is deleted from Licenses issued in the State of North Dakota. The site of any arbitration will be agreeable to all parties.
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- This Amendment may be executed in counterparts, which together shall constitute one and the same instrument. Signatures via Conga Sign, DocuSign, .PDF file, facsimile, or other electronic format have the same force and effect as originals.
(Signatures page follows)
| 2024 | 2023 | |---|---| North Dakota Amendment
Rhode Island Amendment
Amendment To The Holiday Hospitality Franchising, LLC Atwell Suites License Agreement Pursuant To The Rhode Island Franchise And Distributorship Act
Notwithstanding anything to the contrary set forth in the above License Agreement ("License"), the following provisions shall supersede and apply to each License for an Atwell Suites Hotel issued in the State of Rhode Island:
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- In accordance with the provision under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq.), paragraphs 11.C(1)(b) and (d) of the License shall be amended to include the following language: "Enforceability of this provision is a matter governed by Federal Bankruptcy Law and enforceability or nonenforceability is subject to that law and rulings of a court of competent jurisdiction."
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- Section 19-28.14 of the Rhode Island Franchise Investment Act provides that: "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act." This provision will also apply to the Guaranty.
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Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
The 2025 Atwell Suites Franchise Disclosure Document includes several state-specific amendments that address the enforceability of certain provisions within the franchise agreement. These amendments generally state that if a provision in the agreement is inconsistent with state law, the state law will take precedence. This suggests that the illegality or unenforceability of one provision does not necessarily void the entire agreement, but rather that the conflicting provision will be superseded by the relevant state law.
Specifically, amendments for California, Hawaii and North Dakota indicate that if a provision within the Atwell Suites license agreement is inconsistent with their respective state laws, then the state law will control. For example, the North Dakota amendment states, "The laws of the State of North Dakota supersede any provisions of the License, or Georgia law, if such provisions are in conflict with such North Dakota laws." This ensures that franchisees operating in these states are protected by their local laws, even if the standard Atwell Suites agreement contains conflicting terms.
Amendments for Maryland, New York, and Washington also address specific provisions such as general releases, venue selection, and statute of limitations, stating that certain aspects may not be enforceable under their respective state's franchise laws. These amendments reflect a common practice in franchising where state laws are designed to protect franchisees, and franchisors must comply with these regulations, potentially modifying standard agreement terms to align with local legal requirements. Prospective Atwell Suites franchisees should carefully review the amendment specific to their state to understand how these modifications may affect their rights and obligations under the franchise agreement.