What does the Atwell Suites Guaranty constitute, a guaranty of payment and performance or a guaranty of collection?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The Guaranty constitutes a guaranty of payment and performance and not of collection, and each Guarantor specifically waives any obligation of IHG to proceed against Licensee or any money or property held by Licensee or by any other person or entity as collateral security, by way of set off or otherwise.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites's 2025 Franchise Disclosure Document, the Guaranty constitutes a guaranty of payment and performance, not of collection. This means that the guarantor is responsible for ensuring that all payments and obligations of the licensee (the franchisee) are fulfilled.
Specifically, the guarantor waives any requirement for IHG (the franchisor) to first pursue the licensee or any assets held by the licensee before seeking fulfillment from the guarantor. This is a significant point, as it allows Atwell Suites to seek payment or performance directly from the guarantor if the franchisee defaults, without having to exhaust other legal or collection remedies first.
This type of guaranty is more comprehensive than a guaranty of collection, which would typically require the franchisor to first attempt to collect from the franchisee before turning to the guarantor. By having a guaranty of payment and performance, Atwell Suites aims to secure its financial interests and ensure operational compliance more effectively.