What is SCH's role in funding purchases for Even Hotels 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, SCH (presumably, Six Continents Hotels) may choose to fund a new franchisee's purchases from approved suppliers before the Even Hotels location opens. If SCH decides to do this, they will then invoice the franchisee for the amount of the purchases, which the franchisee is obligated to reimburse.
This arrangement benefits the franchisee by potentially easing the initial financial burden of opening a new Even Hotels location. Instead of paying suppliers directly upfront, the franchisee can reimburse SCH later, possibly allowing for more flexible payment terms.
However, the FDD also states that if SCH funds these purchases, Holiday (another related entity) will not receive fees from the approved suppliers. This suggests that SCH's decision to fund purchases may be influenced by the potential loss of these fees. Prospective franchisees should clarify with Even Hotels the specific circumstances under which SCH would consider funding purchases and what the repayment terms would entail.