Is SCH obligated to provide a guaranty to an Atwell Suites franchisee?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
RECITALS
- A. IHG owns and licenses the "Brand System" (as defined in paragraph 1.B. below). Licensee is the owner of the Hotel and has requested a license to use the Brand System to operate the Hotel as a Brand System Hotel (as defined in paragraph 1.B. below).
- B. IHG shall grant to Licensee a non-exclusive license to operate the Hotel as a Brand System Hotel, subject to the terms of this License.
- C. Guarantor(s) will provide the Guaranty.
- D. In granting this non-exclusive license, IHG has relied upon the business skill, financial capacity, and character of Licensee and the Guaranty to be provided by the Guarantor(s).
Source: Item 10 — FINANCING (FDD page 75)
What This Means (2025 FDD)
The 2025 Atwell Suites Franchise Disclosure Document does not state that Six Continents Hotels, Inc. (SCH) is obligated to provide a guaranty to an Atwell Suites franchisee. However, the FDD does mention a guarantor in the recitals section of the license agreement.
Specifically, the document states that "Guarantor(s) will provide the Guaranty." It also indicates that IHG (InterContinental Hotels Group) relies on the guaranty to be provided by the guarantor(s), as well as the business skill and financial capacity of the licensee, when granting the non-exclusive license to operate the hotel as an Atwell Suites hotel.
Because the FDD does not specify who the guarantor is, a prospective franchisee should clarify with Atwell Suites who is expected to provide the guaranty and what obligations the guarantor would have. This is a crucial point to understand, as it affects the financial responsibilities and conditions of the franchise agreement.