For Atwell Suites, under what condition can AT&T require a deposit from the Eligible Participant or its Affiliates?

According to Atwell Suites's 2025 Franchise Disclosure Document, AT&T has the right to request a deposit from the Eligible Participant, which refers to the franchisee, or its Affiliates under specific circumstances. AT&T can require this deposit if, in its reasonable judgment, it determines that the Eligible Participant or its Affiliates are not creditworthy. Furthermore, AT&T is entitled to apply this deposit to cover any outstanding charges owed to them.

This condition is important for prospective Atwell Suites franchisees to understand, as it directly impacts their financial obligations and relationship with AT&T. If AT&T deems the franchisee or its affiliates as not creditworthy, they may be required to provide a deposit, potentially tying up additional capital. This assessment of creditworthiness is based on AT&T's reasonable judgment, which introduces a degree of subjectivity, although it is expected to be based on objective financial criteria.

It is essential for potential franchisees to maintain a good credit standing to avoid such deposit requirements. Additionally, franchisees should seek clarity from Atwell Suites and AT&T regarding the specific criteria used to determine creditworthiness and the conditions under which the deposit will be returned or applied to outstanding charges. Understanding these terms upfront can help franchisees better manage their finances and avoid potential disputes with AT&T during the franchise term.