What is Even Hotels acknowledging regarding the disablement of preferred Card Verification Method (CVM) requirements for chip cards, and what liability does FreedomPay have in this situation?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
HOTEL HEREBY ACKNOWLEDGES THAT IT HAS BEEN INFORMED AND FULLY UNDERSTANDS THAT ANY DISABLEMENT OF THE PREFERRED CVM REQUIREMENTS FOR CHIP CARDS; OR OTHER SUPPRESSING OF PREFERRED CVM REQUIREMENTS, IS AT HOTEL'S SOLE RISK AND FREEDOMPAY SHALL HAVE NO LIABILITY TO HOTEL OR ANY THIRD PARTY FOR FRAUD CLAIMS OR CHARGEBACKS; A FRAUD CLAIM WILL RESULT IN A LOST CHARGEBACK TO HOTEL DESPITE THE IMPLEMENTATION OF EMV BY FREEDOMPAY IN HOTEL'S SYSTEM, AND THAT AS SUCH, HOTEL ASSUMES ALL RISK THAT DISABLING PREFERRED CVM REQUIREMENTS ENTAILS, INCLUDING LIABILITY FOR THE CHARGEBACKS.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, Even Hotels acknowledges that if it disables the preferred Card Verification Method (CVM) requirements for chip cards, or suppresses these requirements in any other way, it does so at its own risk. This means that the hotel, as the franchisee, is fully responsible for any resulting fraud claims or chargebacks. FreedomPay, the payment processing service, bears no liability to Even Hotels or any third party for these potential losses.
Even if Even Hotels implements EMV (Europay, Mastercard, and Visa) technology through FreedomPay, disabling the preferred CVM can still lead to lost chargebacks in the event of a fraud claim. Therefore, Even Hotels assumes all risks associated with disabling preferred CVM requirements, including the liability for chargebacks. This disclaimer highlights the importance of adhering to the recommended security protocols for card transactions to minimize the risk of fraud and financial losses.
This arrangement places a significant responsibility on the Even Hotels franchisee to ensure that card payment systems are configured to use the preferred CVM. Failure to do so can result in the franchisee bearing the full financial burden of fraudulent transactions, even with EMV implementation. Prospective franchisees should carefully consider the implications of this policy and ensure they have adequate systems and training in place to manage card payment security effectively.