Are Even Hotels owned and managed by SCH required to pay the Services Contribution?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
l in connection with the Brand System or in connection with any business activities of its parents, subsidiaries, divisions or affiliates; and
- (f) make available to you consultation and advice pertaining to problems you encounter in operations, facilities and marketing.
Services Contribution; Advertising, Marketing and Promotion:
Hotels that SCH owns and manages and all Brand System licensees must pay the Services Contributions specified in paragraph 3.B of the License and summarized in Item 6 of this disclosure document. Holiday will use these funds as it determines to develop, support and/or administer marketing, reservation and training programs. The Services Contribution cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of your Hotel. Holiday and its affiliates are not responsible for any of these costs.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 70–82)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, hotels that are owned and managed by SCH (presumably referring to Service Company Holiday) or its affiliates are required to pay the Services Contribution. This contribution is also mandatory for all Brand System licensees. The amount of the Services Contribution is detailed in Item 6 of the FDD and paragraph 3.B of the License Agreement, and it varies depending on the specific hotel brand group.
The Services Contribution is used by Holiday to develop, support, and administer marketing, reservation, and training programs for the Even Hotels brand. These funds are intended to strengthen the brand through activities such as awareness advertising, research, and the development of new services. However, the funds may also be used for short-term revenue enhancement and seasonal marketing programs. It is important to note that the Services Contribution cannot be used for the maintenance, repair, modernization, renovation, or upgrading of an individual Even Hotels location.
Holiday has the ability to change the Services Contribution from time to time. They can increase the contribution by up to 1% of Gross Rooms Revenue with 30 days' advance written notice. After such an increase, Holiday cannot implement another discretionary increase for 24 months. The maximum increase allowed over the term of the license is 2% of Gross Rooms Revenue. The FDD also specifies that in the fiscal year ended December 31, 2024, the allocation of marketing funds was as follows: 49% for media, advertising, promotions, and marketing programs, 16% for sales, 6% for hotel performance support, 5% for administration, and 24% for other costs.
Even Hotels franchisees should understand that the Services Contributions are pooled together with contributions from other brands within Holiday's portfolio. These pooled funds are then distributed for marketing, reservations, and other related activities across the various brands. Holiday has the sole discretion in determining how these funds are allocated and is not obligated to spend any specific amount in the vicinity of a particular hotel or ensure that any individual hotel benefits directly or proportionately from the contributions paid. The FDD states that Holiday anticipates all Services Contributions will be expended during the taxable year, with any surplus or deficit carried over to the following year. Furthermore, Services Contribution monies are not used to promote the sale of licenses.