Regarding the Even Hotels Participation Agreement, is an Eligible Participant allowed to assign the agreement without AT&T's consent, and if not, under what conditions can AT&T withhold consent?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
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- This Participation Agreement may not be assigned by Eligible Participant without the written consent of AT&T, which consent shall not be unreasonably withheld, delayed, or conditioned. Any assignment in contravention of the foregoing shall be null and void.
10.6 Assignment and Subcontracting.
(a) Eligible Participant may, without AT&T's consent but upon notice to AT&T, assign in whole or relevant part its rights and obligations under this Agreement to an Eligible Participant Affiliate. AT&T may, without Eligible Participant's consent but upon notice to Eligible Participant, assign in whole or relevant part its rights and obligations under this Agreement to an AT&T Affiliate. In no other case may this Agreement be assigned by either party without the prior written consent of the other party (which consent will not be unreasonably withheld or delayed). In the case of any assignment, the assigning party shall remain financially responsible for the performance of the assigned obligations.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, an Eligible Participant generally cannot assign the Participation Agreement without AT&T's written consent. However, AT&T's consent cannot be unreasonably withheld, delayed, or conditioned. Any assignment attempted without AT&T's consent, except as described below, is considered void.
There is an exception to this rule. An Eligible Participant can assign its rights and obligations under the agreement to an "Eligible Participant Affiliate" without AT&T's consent, provided that AT&T receives notice of the assignment. Similarly, AT&T can assign its rights and obligations to an AT&T Affiliate without the Eligible Participant's consent but must provide notice to the Eligible Participant.
In any assignment situation, the assigning party remains financially responsible for the performance of the obligations that have been assigned. This means that even if an Even Hotels franchisee transfers the agreement to another party, the original franchisee remains liable for ensuring the terms of the agreement are fulfilled. This provision protects AT&T's interests by ensuring a responsible party is always accountable for the agreement's performance.