Under what circumstances will the Reserve Account for Atwell Suites be fully funded immediately?

According to Atwell Suites' 2025 Franchise Disclosure Document, the Reserve Account will be fully funded immediately in specific circumstances. These circumstances include instances of fraud, suspected fraud, the occurrence of an Event of Default, or if any party provides notice of termination of the Agreement.

This means that if Atwell Suites suspects a franchisee of fraudulent activity, or if the franchisee violates the franchise agreement (resulting in an Event of Default), Atwell Suites can demand immediate and full funding of the Reserve Account. Similarly, if either the franchisee or Atwell Suites decides to terminate the franchise agreement, the Reserve Account must be immediately fully funded.

The Reserve Account serves as a financial safeguard for Atwell Suites, ensuring funds are available to cover potential losses or liabilities arising from the franchisee's actions or the termination of the agreement. This requirement protects Atwell Suites from financial risks associated with franchisee misconduct or termination-related expenses.

Prospective Atwell Suites franchisees should understand that these conditions could require them to deposit a significant sum of money into the Reserve Account on short notice if any of these triggering events occur. Franchisees should carefully review the definition of "Event of Default" in their franchise agreement to fully understand the circumstances that could lead to immediate funding of the Reserve Account.