Is GIAC obligated to make a loan to an Atwell Suites franchisee?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Holiday does not offer any formal program for direct or indirect financing. Holiday, SCH or its affiliate, General Innkeeping Acceptance Corporation ("GIAC") may furnish loans or guaranties to licensees. Holiday, SCH and GIAC consider making loans or guaranties under terms and conditions that would be negotiated on a case -by -case basis with the prospective licensee and any decision to make a loan or provide a guaranty would be made in the judgment of Holiday, SCH or GIAC alone, and conditioned upon approval of the Executive Committee and Board of Directors. It is your responsibility alone to obtain adequate financing for all expenses related to the development, opening and operation of the hotel.
Source: Item 10 — FINANCING (FDD page 75)
What This Means (2025 FDD)
According to the 2025 Atwell Suites FDD, General Innkeeping Acceptance Corporation (GIAC), an affiliate of the franchisor, is not obligated to provide loans or guaranties to franchisees. While GIAC, Holiday (the franchisor), or SCH (Six Continents Hotels, Inc.) may furnish loans or guaranties, this is not a guaranteed offering. Any decision to provide financing is at the sole discretion of Holiday, SCH, or GIAC. Approval is also conditional upon the approval of the Executive Committee and Board of Directors.
This means that prospective Atwell Suites franchisees should not rely on receiving financial assistance from GIAC, Holiday, or SCH. Franchisees must secure their own financing for all expenses related to the development, opening, and operation of their hotel. This is a common practice in the franchise industry, as franchisors typically do not directly finance franchisees but may offer assistance in connecting them with third-party lenders.
Given this information, it is crucial for potential Atwell Suites franchisees to have a solid financial plan and explore various financing options independently. They should also inquire with Holiday, SCH, or GIAC about the specific criteria and conditions they consider when evaluating loan or guaranty applications. Understanding these factors can help franchisees better prepare their financing proposals and increase their chances of securing funding, although there is no assurance of approval.