For Atwell Suites, what must a licensee ensure is insured within their business interruption insurance policy?

According to Atwell Suites' 2025 Franchise Disclosure Document, franchisees must ensure their business interruption insurance policy covers royalties, service contributions, and any other sums payable to IHG. This insurance policy should protect against all risks of physical loss or damage. Furthermore, the policy must be endorsed to allow payments to be made directly to IHG.

This requirement means that if a franchisee's Atwell Suites hotel experiences a business interruption due to physical loss or damage (such as a fire, storm, or other covered event), the insurance policy will cover the ongoing royalties, service contributions, and other fees owed to IHG during the period of interruption. This protects IHG's revenue stream even when the hotel is not fully operational.

For a prospective Atwell Suites franchisee, this stipulation highlights the importance of obtaining adequate business interruption insurance and ensuring that the policy specifically includes coverage for payments to IHG. It also emphasizes the need to carefully review the policy's terms and conditions to understand what types of events are covered and how payments will be made. Franchisees should also confirm that the insurance company is willing to endorse the policy to allow direct payments to IHG, as required.

This requirement is not uncommon in franchising, as franchisors often rely on consistent royalty and fee payments from franchisees. By requiring business interruption insurance to cover these payments, Atwell Suites aims to mitigate its financial risk in the event of unforeseen circumstances affecting a franchisee's operations.