If the purchaser of an Even Hotels Participating Property does not assume the Participation Agreement, what financial responsibility does the seller have?

According to Even Hotels' 2025 Franchise Disclosure Document, if a Participating Property is sold, the seller must make commercially reasonable efforts to ensure the buyer assumes the remaining term of the Participation Agreement. If the seller fails to notify the purchaser, or the purchaser does not agree to assume the agreement, the seller is responsible for any charges and fees associated with early termination.

The financial responsibility of the seller is capped at the prorated amount of fees remaining on the 36-month term of the Participation Agreement. This means the seller's liability is limited to the remaining portion of the agreement's fees, calculated proportionally over the original 36-month period. For example, if the agreement had 12 months remaining, the seller would be responsible for one-third of the total fees.

This provision protects Even Hotels and its suppliers by ensuring that Participation Agreements are either continued by the new property owner or that the original owner covers the costs of early termination. For a prospective franchisee, this highlights the importance of understanding the terms of the Participation Agreement and the potential financial implications when selling the property. It also emphasizes the need to communicate effectively with potential buyers about assuming the agreement to avoid incurring termination fees.