How is the Liquidated Damages Payment calculated for Atwell Suites if the franchise is terminated prematurely before Holiday authorizes the use of the Brand System?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of calculating the pre-opening liquidated damages set forth in paragraph 13.J of the License, "mature hotels" means all Suites hotels which were open for two full years or longer; were franchised or, alternatively, owned and/or managed by Holiday or one of its affiliates; and, were not in default of their applicable license or management agreement obligations as of the applicable date.
Source: Item 6 — OTHER FEES (FDD pages 30–56)
What This Means (2025 FDD)
I am unable to provide information on how the Liquidated Damages Payment is calculated for Atwell Suites if the franchise is terminated prematurely before Holiday authorizes the use of the Brand System, according to the 2025 Franchise Disclosure Document. The document does mention liquidated damages in paragraph 13.J of the license agreement, in the context of defining "mature hotels" for pre-opening liquidated damages calculations. However, the specific calculation method for early termination before brand system authorization is not detailed in the provided excerpts.
A prospective Atwell Suites franchisee should carefully review paragraph 13.J of the actual license agreement within the FDD to fully understand the terms and conditions regarding liquidated damages. This section would outline the specific formulas and factors used to determine the payment amount if the franchise agreement is terminated before the hotel opens and is authorized to use the Brand System.
To gain a comprehensive understanding of the potential financial implications, it is essential to consult with a franchise attorney or financial advisor. They can help interpret the legal and financial jargon in the FDD and assess the risks associated with early termination of the franchise agreement. Direct communication with the franchisor to seek clarification on this specific scenario is also advisable.