What amounts are included in the reimbursement for chargebacks that an Even Hotels franchisee must pay?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
7.1 Chargebacks Generally. You must reimburse us for all transactions you submit that are charged back and all related amounts, including: (a) all Chargebacks; (b) all fees, fines, penalties, assessments, and other amounts related to disputing or arbitrating a Chargeback or failing to produce records within applicable time limits; and (c) all Chargeback Fees set forth on the Fee Schedule or elsewhere in the Agreement, regardless of whether a Chargeback is settled in your favor or the Cardholder's favor.
6.5 Excessive Chargebacks. If your Chargeback percentage for any line of business exceeds the estimated industry Chargeback percentage, you shall, in addition to the Chargeback fees and any applicable Chargeback handling fees or fines, pay us an excessive Chargeback fee for all Chargebacks occurring in such month in such line(s) of business.
Each estimated industry Chargeback percentage is subject to change from time to time by us in order to reflect changes in the industry Chargeback percentages reported by Visa, Mastercard or Discover.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, franchisees are required to reimburse the company for chargebacks. This reimbursement covers all transactions that are charged back, along with related amounts. Specifically, the franchisee is responsible for (a) all Chargebacks, (b) all fees, fines, penalties, assessments, and other amounts related to disputing or arbitrating a Chargeback or failing to produce records within applicable time limits, and (c) all Chargeback Fees set forth on the Fee Schedule or elsewhere in the Agreement. This applies regardless of whether the chargeback is settled in the franchisee's favor or the cardholder's favor.
This means that if a customer disputes a charge and the chargeback is processed, the Even Hotels franchisee will have to cover not only the original disputed amount but also any associated costs incurred during the dispute resolution process. These costs can include fees, fines, and penalties levied by card organizations like Visa or Mastercard. The franchisee is also responsible for chargeback fees as outlined in the franchise agreement or fee schedule.
Furthermore, if the Even Hotels franchisee's chargeback percentage exceeds the estimated industry chargeback percentage for any line of business, the franchisee will also have to pay an excessive chargeback fee for all chargebacks occurring in that month for that line of business, in addition to the standard chargeback fees and handling fees or fines. The industry chargeback percentage is subject to change by Even Hotels to reflect changes reported by Visa, Mastercard, or Discover.
It is important for prospective Even Hotels franchisees to understand these chargeback-related financial responsibilities, as they can significantly impact profitability. Franchisees should carefully review the Fee Schedule and the Your Payments Acceptance Guide mentioned in the FDD to fully understand the potential costs associated with chargebacks and the steps they can take to minimize them. They should also be aware of how the industry chargeback percentage is calculated and how it could affect their fees.