Does the release and covenant not to sue in the Atwell Suites license agreement survive the termination of the license?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
I. General Release and Covenant Not to Sue.
Licensee and its respective heirs, representatives, successors and assigns, hereby release, remise and forever discharge IHG and its Affiliates and each of their directors, employees, agents, successors and assigns from any and all claims, whether known or unknown, of any kind or nature, absolute or contingent, if any there be, at law or in equity, from the beginning of time to, and including, the date of IHG's execution of this License, and Licensee and its respective heirs, representatives, successors and assigns do hereby covenant and agree that they will not institute any suit or action at law or otherwise against IHG, directly or indirectly relating to any claim released hereby by Licensee; provided, however, that nothing contained in this release is intended to disclaim or require Licensee to waive reliance on any representation that IHG made in the Franchise Disclosure Document that it provided to Licensee. This release and covenant not to sue shall survive the termination of this License. Licensee shall take whatever steps are necessary or appropriate to carry out the terms of this release and covenant not to sue upon IHG's request.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, the release and covenant not to sue within the license agreement does indeed survive the termination of the license. This means that even after the franchise agreement ends, the franchisee is still bound by the terms of the release, preventing them from pursuing legal action against IHG (the parent company) and its affiliates regarding any claims covered by the release.
Specifically, the franchisee and their heirs, representatives, successors, and assigns release IHG and its affiliates from all claims, known or unknown, from the beginning of time up to the date of IHG's execution of the license. The franchisee also agrees not to institute any suit or action against IHG related to any claim released. However, this release does not require the franchisee to waive reliance on any representation that IHG made in the Franchise Disclosure Document.
This clause has significant implications for potential Atwell Suites franchisees. It provides IHG with long-term protection from potential lawsuits, even after the franchise relationship has ended. Franchisees should carefully consider the scope of this release and covenant not to sue before entering into a franchise agreement, as it could limit their legal options in the future. It is advisable to seek legal counsel to fully understand the implications of this clause.