What happens if Atwell Suites owes any amounts to Company or Bottler under this or any other agreement?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon Customer's receipt of notice of expiration or termination of this Agreement, Customer will also pay, to the extent not paid within (45) days of being invoiced by Company and Bottler for any such unearned funding or unbundling costs, interest at the rate of 1%, compounded monthly, or such lesser percentag
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
Based on the 2025 FDD, if an Atwell Suites hotel, referred to as 'Customer' in this context, fails to pay amounts owed to the 'Company' (likely referring to the franchisor or a related entity) or a 'Bottler' within 45 days of being invoiced for unearned funding or unbundling costs, Atwell Suites will incur interest on the outstanding amount.
The interest rate is set at 1% compounded monthly, or a lesser percentage if required by law. This applies specifically to unearned funding or unbundling costs, which may arise from early termination of the agreement and can include costs related to removing and remanufacturing equipment, as well as the unamortized cost of installation and removal of cold drink equipment.
This clause incentivizes prompt payment by Atwell Suites franchisees. The 1% monthly interest rate (equivalent to 12.68% annually) is a significant penalty, higher than typical bank lending rates, and could substantially increase the amount owed if payments are delayed. Franchisees should ensure they understand the conditions under which unbundling costs may be incurred and have a plan for timely payment of invoices to avoid these interest charges.
It is important for prospective Atwell Suites franchisees to clarify what constitutes 'unearned funding' and 'unbundling costs' during the due diligence process. Understanding these potential expenses and the associated interest penalties is crucial for managing the financial obligations of the franchise.