If the Services provided to an Even Hotels franchisee are suspected of infringing intellectual property rights, what options does the Processor have?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
If any part of the Services is determined or reasonably suspected to be infringing, Processor, at its option and expense, shall: (w) procure for you the continued use of such Services; (x) replace such Services with non infringing Services that are a functional equivalent; (y) modify such Services so that they become non-infringing and remain functionally equivalent, provided that, if (x) or (y) is the option chosen by Processor, your intended use of such Services is not materially impaired; or (z) terminate such Services in their entirety upon written notice to you, and without further liability to you hereunder other than Processor's indemnification obligations hereunder and, subject to the Liability Cap, any direct damages incurred by you as a result of such termination.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, if any part of the services is determined or reasonably suspected to be infringing, the Processor has several options. The Processor can, at its own expense, procure for the franchisee the continued use of such services. Alternatively, the Processor can replace the infringing services with non-infringing services that are functionally equivalent. Another option is for the Processor to modify the services so that they become non-infringing while remaining functionally equivalent, ensuring the franchisee's intended use of the services is not materially impaired.
If the Processor chooses to replace or modify the services, it must ensure that the franchisee's intended use of the services is not materially impaired. This means the franchisee should still be able to operate their Even Hotels location effectively.
Finally, the Processor has the option to terminate such services entirely upon written notice to the franchisee. In this case, the Processor's liability is limited to its indemnification obligations and, subject to the Liability Cap, any direct damages incurred by the franchisee as a result of the termination. This provides some financial protection for the franchisee if the services are terminated due to infringement issues.