Who is responsible for Chargebacks arising from fraudulent activity processed through the Merchant Systems of an Even Hotels franchise?
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).
- 2.5 You Are Responsible for Your Merchant Account and Merchant Systems. You are exclusively responsible for: (a) all activity and transactions (including fraudulent activity and fraudulent transactions) that occur in connection with your Merchant Account or through your Merchant Systems, regardless of whether such activity and transactions are undertaken by authorized personnel, unauthorized personnel, Merchant Providers, or other Third Parties; (b) ensuring that the Merchant Account and Merchant Systems, including any point-of-sale equipment, terminals, and gateways, are used in accordance with the Agreement and are secure; and (c) implementing appropriate controls to prevent your authorized personnel, your unauthorized personnel, and Third Parties from submitting credits, voids, and other transactions that are not bona fide transactions. For avoidance of doubt, you are exclusively responsible and liable for: (x) all transactions sent to us for processing through your Merchant Account or Merchant Systems (including fraudulent transactions); (y) all use of the Services; and (z) all related Servicers Fees, Third Party Based Fees, Chargebacks, and other amounts, whether arising from bona fide, unauthorized, or fraudulent activities or transactions.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the franchisee is exclusively responsible for chargebacks arising from fraudulent activity processed through their merchant systems. This responsibility extends to all activity and transactions, including fraudulent ones, occurring in connection with the franchisee's merchant account or systems, regardless of whether the activity is undertaken by authorized or unauthorized personnel, Merchant Providers, or other Third Parties.
This means that Even Hotels franchisees bear the financial risk associated with fraudulent transactions processed through their systems. They are also responsible for ensuring that their merchant account and systems, including point-of-sale equipment, terminals, and gateways, are used securely and in accordance with the franchise agreement. Franchisees must implement appropriate controls to prevent unauthorized personnel and third parties from submitting fraudulent transactions.
Furthermore, the Even Hotels franchisee is exclusively responsible and liable for all transactions sent for processing through their merchant account or systems, including fraudulent transactions, all use of the services, and all related Servicers Fees, Third Party Based Fees, Chargebacks, and other amounts, whether arising from bona fide, unauthorized, or fraudulent activities or transactions. This allocation of responsibility highlights the importance of robust security measures and diligent monitoring of all transactions within the Even Hotels franchise to mitigate the risk of financial losses due to fraud.