What was the total value of loan guarantees that Atwell Suites had in place as of December 31, 2024?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
(i) also the fair value of the deferred compensation plan liabilities.
The level 3 investment was an addition during the prior year and the increase in 2024 reflects a further addition. There were no material transfers into and out of Level 3 during the year and there has been no change to the fair value.
Notes to Consolidated Financial Statements (continued)
15. Performance guarantees
From time to time, the Company will grant a performance guarantee to encourage property owners to enter into a management agreement. The Company has two outstanding guarantees at December 31, 2024 (three at December 31, 2023 and four at December 31, 2022), all provided by wholly owned subsidiaries of the Company.
Under these guarantees, amounts will become payabl
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, as of December 31, 2024, the company had $30.7 million in loan guarantees in place. This is down from $50.2 million the previous year. The FDD specifies that these guarantees are provided to facilitate third-party ownership of hotels operating under franchise or management agreements with Atwell Suites.
The document indicates that while Atwell Suites provides these loan guarantees, the likelihood of the company needing to make a payment under these guarantees is currently considered not probable. The largest single guarantee amounts to $21.3 million as of December 31, 2024, and the underlying loan matures in 2029. Furthermore, should Atwell Suites be required to fund any amount under these guarantees, there is a cross-indemnity agreement in place, allowing the company to seek compensation for the other partners' share.
It is also noted that two of these guarantees include covenants designed to ensure the financial stability of the company, and Atwell Suites does not anticipate breaching any of these covenants. This suggests that these guarantees are carefully structured to mitigate risk and protect the company's financial interests. For a prospective franchisee, this information indicates the level of financial risk Atwell Suites is willing to take to expand its brand and support its franchisees, and the measures it takes to protect itself.