For Atwell Suites, what sections of the agreement survive termination by SCH?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of a termination or expiration of the License Agreement, SCH may elect to terminate this Agreement immediately upon written notice to Client. In the event of a "Change of Control" (defined as a change in total or complete ownership of the Hotel and/or in an event when new partial or majority ownership of the Hotel , whether by merger, investment, or acquisition, results in involvement of another party to the License Agreement that places SCH in a disadvantage if the existing terms of this Agreement are maintained), SCH may elect to terminate this Agreement immediately upon written notice to Client. In the event of such termination by SCH only Sections 2, 3, 4, 7, 8, 9, 10, 11, 13, 14 and 18 herein shall survive such termination.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites FDD, in the event that SCH (presumably the service provider) terminates the agreement due to a termination or expiration of the License Agreement or a Change of Control, certain sections of the agreement will survive. Specifically, Sections 2, 3, 4, 7, 8, 9, 10, 11, 13, 14, and 18 will remain in effect even after the termination.
This means that franchisees need to understand the content of these sections, as they will continue to be bound by them even after the main agreement is terminated. These sections likely cover critical aspects such as payment obligations, confidentiality, intellectual property, dispute resolution, and other key legal terms. A prospective Atwell Suites franchisee should carefully review these sections with their legal counsel to fully understand their post-termination obligations and rights.
The survival of these sections is a fairly standard practice in franchising, designed to protect the franchisor's interests and ensure a smooth transition upon termination. Franchisees should pay close attention to these clauses to avoid any unexpected liabilities or obligations after the franchise relationship ends. It is important to note that the FDD does not define what each of these sections (2, 3, 4, 7, 8, 9, 10, 11, 13, 14, and 18) covers, so further investigation into the full agreement is needed.