Under what condition might additional royalties be charged on revenues from any activity at an Atwell Suites Hotel?

According to Atwell Suites' 2025 Franchise Disclosure Document, additional royalties may be charged on revenues from any activity added at the hotel under specific conditions. These conditions are that the activity is added by mutual agreement and is either not generally offered at other Brand System hotels or is specifically designed or developed by or for IHG (InterContinental Hotels Group) or its affiliates.

This means that if an Atwell Suites franchisee and IHG mutually agree to introduce a new revenue-generating activity at the hotel, and that activity is unique to that location or originates from IHG's own development efforts, then additional royalty fees may apply. The royalty fee is specifically for the franchise rights granted and not for any goods, services, or assistance provided by IHG.

For a prospective franchisee, this implies that introducing new activities to boost revenue could potentially increase royalty payments. It is important to clarify with IHG the royalty implications of any new activities being considered for the hotel to fully understand the potential costs and benefits. Franchisees should ensure they have a clear understanding of what constitutes an activity designed or developed by IHG to avoid unexpected royalty charges.

This clause provides IHG with a mechanism to capture additional revenue from innovations or unique offerings introduced at individual Atwell Suites locations, ensuring that the brand benefits from successful new initiatives. Franchisees need to carefully evaluate the potential profitability of new activities, considering both the revenue they generate and any associated royalty fees, before entering into an agreement with IHG to implement them.