Under what circumstances will an Atwell Suites licensee be required to pay an audit fee to IHG?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
tel. Licensee will maintain an accounting system which fully and accurately reflects all financial aspects of the Hotel and its business. Such records shall include but not be limited to books of account, tax returns, governmental reports, register tapes, daily reports, and complete quarterly and annual financial statements (profit and loss statements, balance sheets and cash flow statements). The requirement to preserve records as set forth herein shall continue beyond the expiration or sooner termination of the License Term.
C. Audit.
IHG may require Licensee to have the Hotel's Gross Suites Revenue and/or monies due hereunder computed and certified as accurate. During the License Term and for two years afterward, IHG and its authorized agents will have the right to verify information required under this License by requesting, receiving, inspecting and auditing, at all reasonable times, any and all records referred to above wherever they may be located (or elsewhere if reasonably requested by IHG). If any such inspection or audit discloses a deficiency in any payments due hereunder, and the deficiency in any payment is not offset by overpayment, Licensee shall immediately pay to IHG the deficiency and interest thereon as provided in paragraph 3.C. along with an audit fee of $3,
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, IHG has the right to audit a licensee's financial records related to Gross Suites Revenue and other monies due under the license agreement, both during the license term and for two years after its termination. This audit is to verify the accuracy of reported information.
An Atwell Suites licensee will be required to pay an audit fee of $3,000 (which IHG may increase) if the audit reveals a deficiency in payments owed to IHG, and this deficiency is not offset by any overpayment. In addition to the audit fee, the licensee is responsible for immediately paying the deficiency along with interest as specified in paragraph 3.C of the FDD.
However, if the audit does not find any deficiency, then no audit fee will be assessed to the Atwell Suites licensee. Conversely, if the audit reveals an overpayment, IHG will credit this amount against future payments due from the licensee or, if the license has been terminated, promptly refund the overpayment without interest.