How long will Even Hotels hold funds in the Reserve Account after the termination of the Agreement?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Holding and Return of Funds. Any Reserve Account will be held by us for the greater of ten (10) months after termination of the Agreement or for such longer period of time as is consistent with our liability for your Card transactions and Chargebacks in accordance with Card Organization Rules, at which time, we will return all remaining amounts in the Reserve Account to you.
We will hold funds pursuant to this Section 13.2 in master account(s) with your funds allocated to separate sub accounts.
Unless specifically required by law, you shall not be entitled to interest on any funds held by us in a Reserve Account.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, any Reserve Account will be held by them for a minimum of ten months after the termination of the agreement. However, Even Hotels may hold the funds for a longer period if it is consistent with their liability for card transactions and chargebacks, as per Card Organization Rules. After this period, Even Hotels will return the remaining amounts in the Reserve Account to the franchisee.
This means that upon termination of the franchise agreement, Even Hotels will retain the funds in the Reserve Account to cover any potential liabilities related to the franchisee's card transactions and chargebacks. The duration of this holding period is determined by whichever is longer: ten months or the period consistent with card organization rules regarding liability. This protects Even Hotels from financial risks associated with the franchisee's past operations.
For a prospective Even Hotels franchisee, this implies that they will not have immediate access to the funds in the Reserve Account upon termination. They should factor in a waiting period of at least ten months before receiving the remaining balance, if any. It is important to understand the Card Organization Rules and how they might extend the holding period beyond the initial ten months. Franchisees should also be aware that they are not entitled to interest on any funds held in the Reserve Account unless specifically required by law.