For Even Hotels, what is the definition of 'mature hotels' used in the liquidated damages calculation?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event IHG terminates this License due to Licensee's breach of any of its obligations under the License prior to the time that Licensee is authorized to use the Brand System at the Hotel, Licensee shall pay to IHG, as liquidated damages, a lump sum equal to the monthly average of all amounts that would have been payable to IHG under paragraphs 3.B.(3) through 3.B.(6) of this License assuming the Hotel had collected Gross Rooms Revenue based on the average daily revenue per available room for all "mature hotels" in the Brand System in the United States for the previous twelve (12) months, as determined by IHG, multiplied by the greater of (a) six (6) or (b) the number of full and partial months from the Effective Date to the termination date of this License. For purposes of this paragraph, "mature hotels" means hotels which were open for two full years or longer; were franchised or, alternatively, owned and/or managed by IHG or one of its Affiliates; and, were not in default of their applicable franchise or management agreement obligations as of the applicable date.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the term 'mature hotels' is used to calculate liquidated damages if the franchise agreement is terminated early due to the franchisee's breach.
The FDD specifies that 'mature hotels' are defined as those that meet all of the following criteria: they have been open for two full years or longer, they are franchised or owned and/or managed by IHG (InterContinental Hotels Group) or one of its affiliates, and they are not in default of their franchise or management agreement obligations as of the applicable date.
This definition is important because it establishes the benchmark for calculating the average daily revenue per available room, which is a key component in determining the liquidated damages owed to IHG. A prospective Even Hotels franchisee should understand this definition, as it could significantly impact the amount of liquidated damages they would be required to pay if they breach the franchise agreement before the hotel is authorized to use the Brand System.