Is an Atwell Suites franchisee liable for chargebacks arising from card transactions submitted by an unapproved assignee of the agreement?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Responsibility for Transactions. You are liable to us for all Chargebacks, Servicers Fees, Third Party Based Fees, and other liabilities arising in connection with: (a) any Card transactions submitted to us for processing by any assignee or transferee of the Agreement (or any part of the Agreement) not previously approved as such by us; and (b) any Card transactions submitted to us following any Material Change not previously approved by us in writing. We may collect amounts owed under this Section 11.3 by setting off or recouping against settlement funds, debiting your Settlement Account, debiting a Reserve Account, or in any other manner we are permitted to collect any other amounts under the Agreement.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites's 2025 Franchise Disclosure Document, franchisees are liable for chargebacks associated with transactions submitted by unapproved assignees or transferees of the franchise agreement. Specifically, the franchisee is responsible for all chargebacks, service fees, third-party based fees, and other liabilities arising from card transactions processed by any assignee or transferee not previously approved by Atwell Suites. This responsibility extends to any card transactions submitted after a material change that Atwell Suites has not approved in writing.
This means that if an Atwell Suites franchisee attempts to transfer or assign their agreement without the franchisor's explicit consent, the franchisee remains financially liable for any chargebacks or fees incurred by the unapproved party. Atwell Suites retains the right to collect these amounts by offsetting them against settlement funds, debiting the franchisee's settlement account or reserve account, or through any other legally permissible method outlined in the agreement.
This provision protects Atwell Suites from financial risks associated with unauthorized transfers or changes in the franchise operation. It ensures that the approved franchisee remains accountable for all financial obligations related to card transactions, even if they attempt to delegate or transfer their responsibilities without proper authorization. Therefore, it is crucial for franchisees to obtain written approval from Atwell Suites before making any assignments, transfers, or material changes to their business operations to avoid potential liability for chargebacks and other fees.