For what liabilities is the Even Hotels client responsible regarding card transactions submitted by an unapproved assignee or after an unapproved Material Change?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Responsibility for Transactions. You are liable to us for all Chargebacks, Servicers Fees, Third Party Based Fees, and other liabilities arising in connection with: (a) any Card transactions submitted to us for processing by any assignee or transferee of the Agreement (or any part of the Agreement) not previously approved as such by us; and (b) any Card transactions submitted to us following any Material Change not previously approved by us in writing. We may collect amounts owed under this Section 11.3 by setting off or recouping against settlement funds, debiting your Settlement Account, debiting a Reserve Account, or in any other manner we are permitted to collect any other amounts under the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, a franchisee is liable for specific financial obligations related to unauthorized actions concerning the franchise agreement. Specifically, the franchisee is responsible for all chargebacks, service fees, third-party-based fees, and other liabilities that arise from card transactions. This liability applies in two scenarios: first, if the franchisee allows an unapproved assignee or transferee to submit card transactions for processing; and second, if card transactions are submitted after a material change to the business that has not been approved in writing by Even Hotels.
This means that if an Even Hotels franchisee attempts to transfer the agreement to another party without prior authorization from Even Hotels, or if they make significant changes to their business operations (such as a change in control, merger, or sale of assets) without written consent, they will be held financially responsible for any issues that arise from card transactions processed under these unapproved conditions. These issues could include chargebacks (when a customer disputes a charge), various service fees, and any fees levied by third-party service providers involved in the transaction processing.
Even Hotels has the right to collect these owed amounts by offsetting them against settlement funds, debiting the franchisee's settlement account, debiting a reserve account, or through any other method permitted under the agreement. This underscores the importance of obtaining written approval from Even Hotels before making any changes to the franchise agreement or the business itself. The franchisee bears the financial risk for unauthorized transactions, so adhering to the approved operational framework is crucial.