What are 'unbundling costs' related to the Atwell Suites dispensing equipment lease?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
If this Lease is terminated with respect to any piece of Equipment for any reason, other than Company removing a piece of Equipment without cause under this section, prior to 100 months from the Commencement Date for that piece of Equipment, Equipment Lessee will pay Company the actual cost of removal (including standard shipping and handling charges) and remanufacturing of that Equipment, as well as the unamortized portion of the costs of (i) installation, (ii) non-serialized parts (e.g., pumps, racks and regulators) and other ancillary equipment.
Collectively, removal costs and items (i) and (ii) are referred to as "unbundling costs."
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites Franchise Disclosure Document, "unbundling costs" related to the dispensing equipment lease consist of several components that a franchisee may have to pay if the lease is terminated early. Specifically, if the lease is terminated before 100 months from the commencement date, and the termination is not due to Atwell Suites removing the equipment without cause, the franchisee is responsible for these costs.
The first component of unbundling costs is the actual cost of removal, including standard shipping and handling charges, as well as the remanufacturing of the equipment. Additionally, the franchisee is responsible for the unamortized portion of the costs associated with the initial installation and any non-serialized parts, such as pumps, racks, and regulators, along with other ancillary equipment.
In simpler terms, if an Atwell Suites franchisee decides to terminate the dispensing equipment lease early, they will have to cover the expenses related to removing the equipment, restoring it, and the remaining value of the installation and parts that haven't been paid off over time. This could potentially be a significant expense, so franchisees should carefully consider the terms of the lease and the potential costs of early termination.