Under what circumstances can the Atwell Suites agreement be terminated immediately by either party?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
8.1 Termination for Cause. If Hotel defaults in the performance of any of its obligations under this Agreement and does not cure such default within twenty (20) days after receipt of a written notice of default from IHG, then IHG may terminate this Agreement, in whole or in part, as of the termination date specified in such written notice. If Hotel breaches the Hotel Agreement, and fails to cure such default within ten (10) days after receipt of a notice of default from IHG or an IHG Affiliate, then IHG may terminate this Agreement, in whole or in part, immediately upon written notice to Hotel as of the termination date specified in the notice, without any cure period.
8.3 Termination for Hotel Bankruptcy Event. IHG may terminate this Agreement, in whole or in part, immediately upon written notice to Hotel upon a Hotel Bankruptcy Event.
8.4 Termination for Hotel Bankruptcy Event. HotelKey or IHG may terminate this Agreement, in whole or in part, immediately upon written notice to Hotel of a Hotel Bankruptcy Event.
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- Termination & Change of Control. 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 Atwell Suites' 2025 Franchise Disclosure Document, the franchise agreement can be terminated immediately by IHG (the franchisor) under specific circumstances. IHG can terminate the agreement immediately upon written notice if the Hotel breaches the Hotel Agreement and fails to cure the default within ten days after receiving notice. Additionally, IHG can terminate the agreement immediately if a Hotel Bankruptcy Event occurs.
Furthermore, if the agreement between IHG and HotelKey regarding the PMS Solution is terminated or expires, IHG has the option to terminate the agreement with the franchisee upon written notice. SCH (presumably a service provider) can also terminate the agreement immediately upon written notice to the client (franchisee) if there is a termination or expiration of the License Agreement or in the event of a "Change of Control" that disadvantages SCH.
It is important for a prospective Atwell Suites franchisee to understand these termination conditions, as they represent situations where the franchise agreement can be ended abruptly. This could have significant financial and operational implications for the franchisee, including potential loss of investment and business interruption. Franchisees should seek clarification from IHG regarding the specific events that constitute a breach of the Hotel Agreement or a Hotel Bankruptcy Event to fully understand their obligations and potential risks.