Is an Even Hotels franchisee allowed to use the Merchant Account for transactions prohibited by the Unlawful Internet Gambling Enforcement Act?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
As part of your obligation to comply with Applicable Law, you agree not to use the Merchant Account and/or the Services for illegal transactions, for example, those prohibited by the Unlawful Internet Gambling Enforcement Act, 31 U.S.C.
Section 5361 et. seq., as may be amended from time to time or for processing and accepting transactions in certain jurisdictions pursuant to 31 CFR Part 500 et. seq. and other laws enforced by OFAC.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from using the Merchant Account for transactions that are illegal, including those prohibited by the Unlawful Internet Gambling Enforcement Act (31 U.S.C. Section 5361 et seq.). This requirement is part of the franchisee's obligation to comply with all applicable laws. The franchisee must also cooperate with Servicers (payment processors) and provide any information necessary to facilitate their compliance with relevant laws, such as those promulgated by OFAC (Office of Foreign Assets Control) and the USA PATRIOT Act.
This restriction means that Even Hotels franchisees must ensure their business operations and transaction processing methods do not violate any laws related to online gambling or other illegal activities. Failure to comply could result in penalties, legal repercussions, and potential termination of the franchise agreement. Franchisees must implement controls and monitoring systems to prevent such transactions from occurring through their merchant account.
This requirement is typical in franchise agreements, as franchisors need to ensure that their brand and franchisees comply with all applicable laws to protect the integrity of the brand and avoid legal issues. Prospective Even Hotels franchisees should carefully review all applicable laws and regulations to ensure full compliance and avoid any prohibited transactions.