Is Even Hotels required to reimburse SCH for purchases funded by SCH before the hotel opens?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 59–68)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, if SCH (presumably, a parent or affiliated company) funds purchases from approved suppliers before the hotel opens, the franchisee must reimburse SCH for those purchases. This arrangement is at SCH's discretion, meaning they may choose to fund these purchases or not.
This has a significant impact on the franchisee's initial investment and cash flow. If SCH funds purchases, it reduces the upfront capital required from the franchisee. However, the franchisee is still responsible for reimbursing SCH, so this essentially defers the cost rather than eliminating it. Franchisees need to factor this potential reimbursement into their financial planning.
It's important to note that if Holiday (another reference to SCH) funds the purchase before the hotel opens, Holiday will not receive fees from approved suppliers. This suggests that the reimbursement from the franchisee is the mechanism by which SCH recoups its investment in these purchases. Prospective Even Hotels franchisees should clarify with SCH the typical terms and conditions of such funding and reimbursement, including any interest or fees charged on the funded amount and the repayment schedule.