Does IHG need to notify an Even Hotels licensee before transferring or assigning the license?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
If Licensee (i) receives an offer to purchase or lease the Hotel or any portion thereof, (ii) desires to sell or lease the Hotel or any portion thereof, or (iii) wishes to convey the Hotel, Hotel site, or any interest in the Hotel or Licensee, Licensee shall give prompt written notice thereof to IHG, stating the identity of the prospective transferee, purchaser or lessee and the terms and conditions of the conveyance, including a copy of any proposed agreement and all other information with respect thereto, that IHG may reasonably require.
Any (i) transfer of Equity Interests in an Entity (other than a transfer expressly permitted hereunder) or (ii) transfer of all or a material part of the Hotel or Hotel site (if the Hotel or Hotel site is owned directly or indirectly by Licensee or by a natural person or Entity that owns any Equity Interest in Licensee), to a new owner shall constitute a change of ownership requiring submittal of an application for a new license.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the licensee is the party required to notify IHG (InterContinental Hotels Group) under certain transfer scenarios, not the other way around. Specifically, the Even Hotels licensee must provide written notice to IHG if they receive an offer to purchase or lease the hotel, desire to sell or lease the hotel, or wish to convey the hotel, hotel site, or any interest in the licensee. This notification must include the identity of the prospective transferee, purchaser, or lessee, along with the terms and conditions of the conveyance, including a copy of any proposed agreement and any other information IHG may reasonably require.
This requirement ensures that IHG maintains control over who operates an Even Hotels franchise and that any potential new owner meets their standards. The FDD states that any transfer of equity interests or transfer of the hotel or hotel site to a new owner requires the submittal of an application for a new license. IHG will then process the change of ownership application based on their current procedures, criteria, and requirements, which include fees, upgrading of the hotel, financial capacity, and operational abilities. If IHG approves the change of ownership, the new owner and IHG will enter into a new license agreement.
If the Even Hotels licensee fails to submit a change of ownership application or if IHG does not approve the application, any conveyance of the hotel, hotel site, or equity interest is considered an unauthorized transfer. Such an unauthorized transfer constitutes a material breach of the license agreement and an abandonment of the franchise, which entitles IHG to terminate the license and exercise all available remedies. This provision underscores the importance of adhering to IHG's transfer requirements to avoid potential legal and financial repercussions.