Under what circumstances can Atwell Suites change processing timing or suspend payments to a franchisee?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.6 Changes in Funding and Suspension of Funding. In addition to any other remedies available to us under the Agreement, you agree that should any Event of Default by Client set forth in Section 12.3 (subject to any available cure periods set forth in Section 12.3) occur, we may, with or without notice, change processing timing or accelerate payment terms and/or suspend credits or other payments of any and all funds, money, and amounts now due or hereafter to become due to you pursuant to the terms of the Agreement, until we have had reasonable opportunity to investigate such event.
Notwithstanding the foregoing, we will make reasonable efforts to notify you as promptly as practicably possible of any such change or suspension.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites Franchise Disclosure Document, the franchisor has the right to change processing timing or suspend payments to a franchisee under specific circumstances related to potential financial risk.
Specifically, Atwell Suites may change processing timing or accelerate payment terms and/or suspend credits or other payments if any Event of Default occurs. An Event of Default includes a material adverse change in the franchisee's business, financial condition, or business prospects; any unauthorized assignment of the agreement; any unapproved material change; irregular card sales, excessive chargebacks, or circumstances that increase financial or security risk to the franchisor; a data security event; or any breach of representations, warranties, or covenants in the agreement.
Atwell Suites will try to notify the franchisee as soon as possible regarding any such changes or suspensions. This clause aims to protect the franchisor from financial losses due to the franchisee's actions or financial instability. It is important for a prospective franchisee to understand these conditions, as they could significantly impact the franchisee's cash flow and business operations if an event of default were to occur.