Under what conditions can IHG terminate the Atwell Suites license with advance notice?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) In accordance with notice from IHG to Licensee, this License will terminate (without any further notice unless required by law), provided that:
- (a) the notice is mailed at least 30 days (or longer, if required by law) in advance of the termination date;
- (b) the notice reasonably identifies one or more breaches of Licensee's obligations; and
- (c) the breach(es) are not fully remedied within the time period specified in the notice.
- (2) If Licensee shall have engaged in a violation of this License, for which a notice of termination was given and termination failed to take effect because the default was remedied during the then preceding 12 months, the period given to remedy defaults will, if and to the extent permitted by applicable law, thereafter be 10 days instead of 30 (provided, however, if there have been two or more violations of this License in the preceding twelve months for which notices of termination were given, upon the next violation, if and to the extent permitted by applicable law, this License may be terminated by IHG immediately upon notice).
- (3) In any judicial proceeding in which the validity of termination is at issue, IHG will not be limited to the reasons set forth in any notice sent under this paragraph.
- (4) If Licensee fails to cure its breach of its obligations timely and in the manner required by IHG, IHG may in its sole discretion suspend the Hotel from access to the Brand System. IHG may also in its sole discretion remove the Hotel's listing from any website services and divert reservations previously made for the Hotel to other Brand System Hotels or IHG Portfolio Brand Hotels. Licensee must pay all costs arising from suspension from the Brand System. IHG's election to suspend the Hotel from said access rather than terminate this License will not: (i) constitute a waiver of any breach by Licensee or of any rights IHG otherwise has to terminate this License; (ii) constitute actual or constructive termination of this License; (iii) constitute an abandonment by IHG of this License; or (iv) entitle Licensee to any compensation of any kind for any alleged losses Licensee might incur as a result of said suspension.
- (5) IHG's notice of termination or suspension of services shall not relieve Licensee of its obligations under this License.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites Franchise Disclosure Document, IHG can terminate the license agreement with advance notice under specific conditions related to breaches of the agreement. IHG must provide written notice to the franchisee at least 30 days in advance (or longer if required by law), clearly identifying the specific breaches of the franchisee's obligations. The franchisee then has a period to fully remedy these breaches, as specified in the notice. If the franchisee fails to correct the issues within the given timeframe, IHG can proceed with terminating the license.
Notably, if Atwell Suites franchisees have previously violated the license agreement and received a termination notice that was resolved within the past 12 months, the cure period for subsequent violations may be reduced to just 10 days, if permitted by law. Furthermore, if there have been two or more violations in the preceding twelve months for which notices of termination were given, upon the next violation, if and to the extent permitted by applicable law, IHG may terminate the license immediately upon notice.
IHG retains the right to present additional reasons for termination in any legal proceedings, even if those reasons were not initially included in the termination notice. Additionally, if a franchisee fails to adequately address the breaches, IHG has the discretion to suspend the hotel's access to the Brand System, remove its listing from websites, and redirect reservations to other hotels within the Brand System or IHG's portfolio. The franchisee is responsible for covering all costs associated with such a suspension. It is important to note that IHG's decision to suspend services rather than terminate the license does not constitute a waiver of any breaches or rights to terminate, nor does it entitle the franchisee to any compensation for losses incurred due to the suspension. The franchisee remains obligated to fulfill their responsibilities under the license agreement even during a suspension.
For franchisees in Minnesota, their rights regarding termination and non-renewal are protected by Minnesota state law, requiring 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal, except in certain specified cases. Similarly, Hawaii Revised Statutes Section 482E-1 provides rights to the Licensee concerning termination or non-renewal of a License, and if the License contains a provision that is inconsistent with the law, the law will control.