For Even Hotels, who is responsible for all activity and transactions that occur in connection with the Merchant Account or through the Merchant Systems?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
You are responsible for all Chargebacks, Third Party Based Fees, Servicers Fees, and other amounts arising from fraudulent activity processed through your Merchant Systems and/or your Merchant Account (regardless of any AVS response that you receive).
- 4.8 Costs. If you or a Merchant Provider (or other Third Party used by you) are determined by any Card Organization, regardless of any forensic analysis or report, to be the likely source of any loss, disclosure, theft or compromise of Cardholder data or Card transaction information or are determined to have caused Cardholder data to be put at risk (together, "Compromised Data Events") and regardless of your belief that you have complied with the Card Organization Rules or any other security precautions and are not responsible for the Compromised Data Event, you must promptly pay us for all related expenses, claims, assessments, fines, losses, costs, penalties, and Issuer reimbursements imposed by the Card Organizations against us (together, "Data Compromise Losses").
In addition to the foregoing, you must also pay us promptly for all expenses and claims made by Issuers against us alleging your responsibility for the Compromised Data Event, apart from any claim procedures administered by the Card Organizations.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the franchisee is responsible for all activity and transactions that occur through their Merchant Systems and/or Merchant Account. This includes responsibility for all Chargebacks, Third Party Based Fees, Servicers Fees, and other amounts arising from fraudulent activity. This responsibility applies regardless of any Address Verification Service (AVS) response received during the transaction process.
This means that as an Even Hotels franchisee, you bear the financial risk for any fraudulent transactions processed through your systems. Even if you use security measures like AVS, you are still liable for chargebacks and fees associated with fraud. The AVS is only meant to help identify potentially fraudulent transactions and does not guarantee the validity of a transaction or impact the approval/denial of authorization requests.
Furthermore, if a Card Organization determines that you or a Merchant Provider used by you are the likely source of any data compromise, you are responsible for all related expenses, claims, assessments, fines, losses, costs, penalties, and Issuer reimbursements imposed on Even Hotels by the Card Organizations. This holds true regardless of whether you believe you complied with Card Organization Rules or took security precautions. You are also responsible for expenses and claims made by Issuers against Even Hotels alleging your responsibility for the data compromise.
In practical terms, this highlights the importance of implementing robust security measures and staying compliant with Card Organization Rules to minimize the risk of fraudulent activity and data breaches. Franchisees should ensure their Merchant Systems are secure and that they and their Merchant Providers adhere to all applicable rules and regulations to protect Cardholder data. Failing to do so can result in significant financial liabilities for the Even Hotels franchisee.