What is Even Hotels prohibited from doing regarding liens and encumbrances on the Equipment?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Hotel covenants that it will not pledge or encumber any of the Equipment or the interest of HPFS in the Equipment in any manner whatsoever nor create or permit to exist any levy, lien or encumbrance thereof or thereon except those created by or through HPFS.
The Equipment shall remain the personal property of HPFS (during the initial 48-month Term) whether or not affixed to realty and shall not become a fixture or be made to become a part of any real property on which it is placed without the prior written consent of HPFS.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the hotel franchisee is restricted from pledging or encumbering any of the equipment or HPFS's interest in the equipment. This means the franchisee cannot use the equipment as collateral for loans or other financial obligations. They also cannot create or permit any levy, lien, or encumbrance on the equipment, except for those created by HPFS (presumably the equipment financing company).
This restriction ensures that HPFS retains clear ownership and control over the equipment. The equipment remains the personal property of HPFS during the initial 48-month term, regardless of whether it's attached to the real estate. It cannot become a fixture or part of the real property without HPFS's prior written consent. This protects HPFS's investment in the equipment and allows them to repossess it in case of default.
For a prospective Even Hotels franchisee, this means they must be aware that they do not own the equipment and cannot use it for financing purposes. They are responsible for maintaining insurance on the equipment and bearing the risk of loss or damage. Understanding these restrictions is crucial for managing the hotel's finances and avoiding potential conflicts with HPFS.