Which bank is identified as 'Bank' in the Even Hotels agreement?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
If (i) the real property used in the operation of the Hotel is owned directly or indirectly by Licensee or by a natural person or an Entity that owns any Equity Interest in Licensee and (ii) Licensee or that natural person or Entity proposes to transfer all or a substantial part of such property to a third party, such transfer shall constitute a transfer under the provisions of this License requiring an application for a new
license agreement, unless Licensee receives IHG's prior written consent for the transaction. Licensee may however, without IHG's consent, mortgage or otherwise grant a security interest in the real estate or other tangible assets of the Hotel (but specifically excluding this License or any right or interest herein) in connection with commercially reasonable financing for the Hotel with a third party bank or other commercial lending institution which is not a competitor of IHG or any of its Affiliates.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the term "Bank" is referenced within the context of real estate transfers and financing for Even Hotels. Specifically, the document states that a franchisee can mortgage or grant a security interest in the hotel's real estate and tangible assets to a third-party bank or other commercial lending institution without needing IHG's prior consent. However, this exclusion does not extend to the Even Hotels license itself or any rights associated with it. The lending institution also cannot be a competitor of IHG or its affiliates.
This provision offers Even Hotels franchisees some flexibility in securing financing for their hotel operations. It allows them to use the hotel's real estate as collateral for loans from traditional banks or lending institutions, which can be crucial for funding improvements, expansions, or managing cash flow. However, franchisees must be mindful of the restrictions in place, particularly the exclusion of the license itself from any security interest and the prohibition on using competitors of IHG as lenders.
Prospective Even Hotels franchisees should carefully consider these financing options and restrictions when developing their business plan and securing funding for their franchise. Understanding the terms under which they can leverage the hotel's real estate for financing is essential for long-term financial stability and growth. It is also important to note that the FDD does not provide an exhaustive list of approved banks, so franchisees will need to conduct their own due diligence to identify suitable lending partners that meet the specified criteria.