Who is authorized to establish the Reserve Account for Even Hotels franchisees?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
13.1 Reserve Account Generally. You expressly authorize us to establish a Reserve Account pursuant to the terms and conditions set forth in this Section 13. The amount of such Reserve Account shall be set by us and may be adjusted by us from time to time, in our sole discretion, based upon your processing history and the potential risk of loss to us as we may determine from time to time.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the franchisor is authorized to establish a Reserve Account for franchisees. Specifically, Even Hotels' FDD states that the franchisee expressly authorizes "us" (referring to the franchisor) to establish a Reserve Account. The amount of the Reserve Account is set by the franchisor and may be adjusted from time to time, based on the franchisee's processing history and potential risk of loss to the franchisor.
This Reserve Account is designed to protect the franchisor against potential financial risks associated with the franchisee's operations, such as chargebacks or fraud. The franchisor has the sole discretion to determine the amount required in the Reserve Account and can modify it as needed based on their assessment of risk.
For a prospective Even Hotels franchisee, this means they should be prepared to fund a Reserve Account as determined by the franchisor. The funds for this account can be drawn from the franchisee's settlement account or other accounts, or through a letter of credit. Understanding the terms and conditions related to the Reserve Account, including how it is funded, managed, and when funds are returned, is crucial for managing their financial obligations as a franchisee.