What are the revenue sources included in 'Rooms Revenue' for Even Hotels?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
(4) For purposes of this paragraph 13.O. the following definitions apply:
- (a) "Gross Revenue" means all revenues and income of any nature derived directly or indirectly from the Hotel or from the use or operation thereof, including without limitation room sales; food and beverage sales; telephone, fax and internet revenues; rental or other payments from lessees, subleases, concessionaires and others occupying or using space or rendering services at the Hotel (but not the gross receipts of such lessees, subleases or concessionaires); and the actual cash proceeds of business interruption, use, occupancy or similar insurance.
- Royalty Fee: | 5% of Gross Rooms Revenue "Gross Rooms Revenue" or "GRR" means the gross revenue and receipts of every kind attributable to or payable for rental of guest rooms/suites at the Hotel including, but not limited to, no-show revenue, early departure or late check-out fees, attrition or cancellation fees, any mandatory fee or surcharge charged to all or substantially all guests renting a room (including, but not limited to, resort fees, although inclusion of such fees or surcharges does not constitute approval by IHG of such fees and surcharges, which may be limited or prohibited); any awards, judgments or settlements representing payment for loss of room sales; and any other revenues allocable to rooms revenue under the Uniform System of Accounting for the Lodging Industry, Eleventh Revised Edition, 2014, as published by the American Hotel & Lodging Association Educational Institute, or any later edition, revision, or replacement that may be designated by IHG (the "Uniform System"). No deductions shall be allowed for charge backs, credit card service charges, commissions, uncollectible amounts or similar items. Charges for any item, including, but not limited to, telephone charges, entertainment, the cost of any food and beverage items, room service or other items provided or made available to a guest as an incident of a guest room/suite rental shall not be considered a deduction from Gross Rooms/Suites Revenue. Gross Rooms/Suites Revenue excludes sales tax, value added tax, or similar taxes on such revenues and receipts.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, Gross Revenue is defined as all revenues and income derived directly or indirectly from the Hotel or its operation. This includes room sales, food and beverage sales, telephone, fax, and internet revenues, as well as rental or other payments from lessees, subleases, concessionaires, and others using space or rendering services at the Hotel. However, it does not include the gross receipts of such lessees, subleases, or concessionaires. It also includes the actual cash proceeds from business interruption, use, occupancy, or similar insurance.
Specifically, regarding Gross Rooms Revenue (GRR), it encompasses all revenue and receipts from guest room/suite rentals. This includes no-show revenue, early departure or late check-out fees, attrition or cancellation fees, and any mandatory fees or surcharges charged to guests renting a room, such as resort fees. It also includes awards, judgments, or settlements representing payment for loss of room sales, and any other revenues allocable to rooms revenue under the Uniform System of Accounting for the Lodging Industry.
However, there are deductions and exclusions. No deductions are allowed for chargebacks, credit card service charges, commissions, uncollectible amounts, or similar items. Charges for items provided to a guest as an incident of a guest room/suite rental, such as telephone charges, entertainment, food and beverage items, or room service, are not considered deductions from Gross Rooms/Suites Revenue. Furthermore, Gross Rooms/Suites Revenue excludes sales tax, value-added tax, or similar taxes on such revenues and receipts.
For a prospective Even Hotels franchisee, understanding what constitutes Gross Revenue and Gross Rooms Revenue is crucial because several fees, such as the Royalty Fee and IHG System Fund Contributions, are calculated as a percentage of Gross Rooms Revenue. Therefore, accurately tracking and reporting these revenues is essential for compliance and financial management.