How does the obligation to meet Even Hotels's standards and specifications in Item 8 relate to the assistance Holiday provides before the hotel opens, as described in Item 11?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
S AND SERVICES**
Except as described below, you are not required to purchase or lease products or services from Holiday or its affiliates, or from suppliers approved by Holiday, or under Holiday's specifications.
Standards and Specifications:
You must build, design, furnish, equip, decorate and supply the Hotel subject to Holiday's approval of your plans. You must equip the Hotel with products which meet the Standards and specifications, including those described in the License and the Standards (see also Item 11). All modernization, renovation and upgrading of your Hotel must also meet the Standards and specifications. Holiday issues specifications by brand of product and in many instances by brand "or equivalent," by physical characteristics and by other methods, depending on the product or service involved. Holiday can make changes to the Standards. These changes will become binding on you as if originally set forth in the Standards. Holiday will provide you with explanation of any change, in writing, at least 30 days before it goes into effect.
Holiday estimates that the Standards and specifications will apply to 90% to 95% of your purchases and leases. If you purchase or lease any equipment or supplies not previously approved by Holiday, you are required to submit a written request for Holiday's approval. Holiday reserves the right to require removal of any non-approved product installed at the Hotel. While Holiday has no obligation to respond within a certain time frame, it expects to do so within 45 to 60 days from receipt of your request. Holiday may require certain information, tests and inspections, at no expense to Holiday, as a condition of approval.
Holiday requires you to hire qualified, licensed, professional advisors with hotel experience in the form of a project team, which must consist of an interior designer with upscale or boutique hotel brand experience and may consist of, depending on complexity and scope of the work, an architect, engineer, art consultant, lighting consultant, or other related specialist when building or renovating an IHG hotel. If you cannot find such licensed professional help, contact your Openings Regional Director. All architects and interior designers must be approved by Holiday prior to the project commencing. Any design work submitted by unqualified individuals hired by you will be rejected and your Hotel can be subject to Plan default, resulting in an assessment of fees under the terms of your License. The fee for such Plan default will be up to $5,000. At our sole discretion, you may be required to remove any non-approved product installed in your Hotel that has not been approved by IHG Plan Review explicitly in writing before installation.
At the time Holiday and you sign a License and before your Hotel opens, SCH may determine to fund your purchases from approved suppliers and then invoice you. You must reimburse SCH for these purchases. If Holiday funds your purchase before your Hotel opens, Holiday will not receive fees from approved suppliers.
In some instances, Holiday receives a small commission from vendors' sales to offset Holiday's costs of implementing the SRD Program. These costs include professional design services for creating new décor schemes for Holiday's licensees, prototype room development and testing, specifications development, negotiating and contracting services for items that the licensee may buy through this program, web site updating and maintenance, and licensee support service expenses. The commission amounts to ½% to 3% for SRD items. The information below reflects operations as of the date of this disclosure document and is subject to change. Standard Room Décor commissions for the year ending December 31, 2024, were $5,600,00.
Suppliers:
If Holiday requires you to purchase equipment, furnishings, supplies or other products for the Hotel from a designated or approved supplier or service provider in the License, the Standards, or other communication to you, then you must purchase the mandated product unless you receive prior approval from Holiday to purchase such products from another source whose products meet such specifications.
Holiday can designate the designers, architects, contractors and suppliers who will perform Renewal Work and brand refresh work at your Hotel and who will provide brand specified products, such as fixtures or furniture, and services.
What This Means (2025 FDD)
According to Even Hotels's 2025 Franchise Disclosure Document, Item 8 outlines the franchisee's obligation to adhere to Holiday's standards and specifications when building, designing, furnishing, equipping, decorating, and supplying the hotel. This is directly related to the assistance Holiday provides before the hotel opens, as detailed in Item 11. Specifically, franchisees must submit preliminary plans at least 210 days before ground break, and final plans at least 120 days before ground break, for Holiday's approval to ensure they meet the brand's standards.
Holiday's assistance includes reviewing construction plans for both conversion and new development to ensure they meet the requirements of the license and the brand standards. While Holiday does not grant site approval, it may deny site approval. Franchisees cannot commence construction until Holiday approves the plans. This process ensures that the Even Hotels brand maintains consistency and quality across all locations, as franchisees must equip the hotel with products that meet the specified standards.
Holiday also provides written specifications for products and materials in the form of a Product Improvement Plan (PIP), which is included as Attachment "B" to the license agreement. This PIP outlines specific renovations and alterations needed to meet the brand's standards and quality requirements, along with dates for submitting plans and drawings, and timelines for construction and opening. Franchisees must also obtain Holiday's approval of a model room before ordering and installing guest room furniture, fixtures, and equipment (FF&E) for new build and conversion projects. Failure to comply with these standards can result in plan default and an assessment of fees up to $5,000.
Holiday inspects and approves the hotel before it opens to confirm compliance with all requirements. If the hotel fails the opening inspection or the franchisee needs to reschedule the opening date, a fee of up to $5,000 may be charged for each extension or additional visit. This rigorous oversight ensures that all Even Hotels locations meet the brand's standards before commencing operations, protecting the brand's reputation and ensuring a consistent guest experience.