What is the liability of FreedomPay to an Atwell Suites franchisee if the franchisee disables preferred CVM requirements for chip cards?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
HOTEL HEREBY ACKNOWLEDGES THAT IT HAS BEEN INFORMED AND FULLY UNDERSTANDS THAT ANY DISABLEMENT OF THE PREFERRED CVM REQUIREMENTS FOR CHIP CARDS; OR OTHER SUPPRESSING OF PREFERRED CVM REQUIREMENTS, IS AT HOTEL'S SOLE RISK AND FREEDOMPAY SHALL HAVE NO LIABILITY TO HOTEL OR ANY THIRD PARTY FOR FRAUD CLAIMS OR CHARGEBACKS; A FRAUD CLAIM WILL RESULT IN A LOST CHARGEBACK TO HOTEL DESPITE THE IMPLEMENTATION OF EMV BY FREEDOMPAY IN HOTEL'S SYSTEM, AND THAT AS SUCH, HOTEL ASSUMES ALL RISK THAT DISABLING PREFERRED CVM REQUIREMENTS ENTAILS, INCLUDING LIABILITY FOR THE CHARGEBACKS.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites Franchise Disclosure Document, FreedomPay bears no liability to the Atwell Suites hotel or any third party for fraud claims or chargebacks if the hotel disables preferred Card Verification Method (CVM) requirements for chip cards. This disclaimer is in place because disabling or suppressing these preferred CVM requirements is considered to be at the hotel's sole risk.
Specifically, if an Atwell Suites franchisee chooses to disable the preferred CVM requirements, any resulting fraud claim will lead to a lost chargeback for the hotel, regardless of FreedomPay's EMV (Europay, Mastercard, and Visa) implementation in the hotel's system. The FDD makes it clear that the hotel assumes all risks associated with disabling preferred CVM requirements, including full liability for any chargebacks that may occur.
In essence, Atwell Suites franchisees need to understand that while FreedomPay provides the EMV technology, the responsibility for secure transaction processing, particularly concerning CVM, rests heavily on the franchisee. This means that franchisees must carefully consider the implications of disabling preferred CVM requirements, as doing so shifts the liability for potential fraud and chargebacks entirely to the hotel, potentially impacting their financial stability.