What fees, fines, or charges will Even Hotels NOT pass through to the franchisee?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) IHG System Fund Contribution. "IHG System Fund Contribution" means the assessments paid by Licensee, comprised of the Services Contribution and the Loyalty Program Contribution, for the IHG System Fund Activities (as defined in paragraph 4.G) to be provided by IHG and its Affiliates.
- a. Services Contribution. A monthly Services Contribution in the amount set forth in Item 5 of Attachment "A". The Services Contribution will typically be invested by IHG in activities that, in IHG's sole business judgment as to the long-term interests of the Brand System, strengthen the brand such as awareness advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services, associated products and platforms, but may also include tactical marketing initiatives more focused on short term revenue enhancement and seasonal marketing programs. The Service Contribution cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel. The Services Contribution does not include costs that Licensee incurs in the acquisition, installation or maintenance of reservations services, equipment or training, or in Licensee's own marketing activities. IHG and its Affiliates are not responsible for any of these costs.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the Services Contribution paid by the franchisee cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the hotel. This contribution also does not include costs that the franchisee incurs in the acquisition, installation, or maintenance of reservations services, equipment or training, or in the franchisee's own marketing activities. IHG and its Affiliates are not responsible for any of these costs.
In simpler terms, while franchisees contribute to the IHG System Fund through a Services Contribution, these funds are specifically allocated to activities that strengthen the Even Hotels brand as a whole. These activities include advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services. The franchisor, IHG, retains sole discretion over how these funds are invested, focusing on the long-term interests of the brand system.
This arrangement means that Even Hotels franchisees are responsible for covering the costs associated with maintaining and upgrading their individual hotel properties. They also bear the expenses related to acquiring and maintaining reservation systems, equipment, and training, as well as their own local marketing efforts. This division of financial responsibility is typical in franchising, where franchisees handle local operational costs while contributing to a system-wide fund for brand development and marketing.