What is the financial threshold for non dismissed judgments that would be considered a non-curable default for an Even Hotels franchise?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In | Summary |
|---|---|---|
| Agreement | ||
| a. Length of the license Term | License: 11.A | The term begins on the Effective Date and expires 20 years Hotel opens in the Brand System for a new development; 10 years or more from date Hotel opens in the Brand System for a conversion; and 10 years or more from Effective Date for a change of ownership or re licensing. |
| b. Renewal or extension of term | License: 11.A | The License does not provide for renewal or term extensions. |
| c. Requirements for you to Renew or Extend | N/A | The License does not provide for renewal or term extensions. If we agree to Re-license, you may be asked to sign a contract with materially different terms and conditions than your original contract. |
| d. Termination by you | N/A | |
| e. Termination by Holiday without | License: N/A | |
| Cause | MTSS: 10.1 | |
| f. Termination by Holiday with | License: 11.B, | Holiday may terminate with cause. |
| Cause (Notes 1 and 2) | 11.C, 13.J and Attachment "B" MTSS: 10.3 | You pay liquidated damages if Holiday terminates under Paragraphs 12.1, 11.C or 13.J. See Note 1 and 2 |
| g. "Cause" defined – defaults which can be cured (Note 2) | License: 11.B and 13.J | Any default other than those listed in "h" below. See Note 2. |
| h. "Cause" defined – non-curable defaults | License: 10, 11.C & Attachment "B" | Non-curable defaults: bankruptcy; non dismissed judgments exceeding $50,000; trademark misuse, or if you contest Holiday's ownership of its trademarks; loss of possession of the property; d |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 87–90)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, a non-curable default includes non dismissed judgments exceeding $50,000. This means that if an Even Hotels franchisee has outstanding judgments against them that total more than $50,000 and these judgments have not been dismissed by a court, Even Hotels has grounds to terminate the franchise agreement.
This provision protects Even Hotels from franchisees who may be in severe financial distress, as outstanding and non dismissed judgments can indicate an inability to manage finances or meet financial obligations. The franchisor needs to protect the brand from financial instability of its franchisees.
For a prospective franchisee, this highlights the importance of maintaining sound financial standing and promptly addressing any legal judgments. Franchisees should ensure they have sufficient financial resources and management practices in place to avoid such defaults, as the consequences can include termination of the franchise agreement.