What sections of the Even Hotels License Agreement cover advertising obligations for franchisees?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Other Assistance During the Operation of the Hotel:
After the opening of the Hotel (see paragraph 4 of the License), Holiday will:
- (a) seek to maintain high standards of quality, cleanliness, appearance and service at all hotels using the Brand System, to promote, protect and enhance the public image and reputation of the EVEN® Hotels brand name, and to increase the demand for services offered by the Brand System. Holiday's judgment in these matters will be controlling in all respects, and it will have wide latitude in making these judgments;
- (b) provide required and optional training programs at various locations, including Holiday's principal place of business;
- (c) provide access to reservation services, if you are in compliance with your material obligations under the License;
- (d) use the "Services Contribution" (see Item 6) for marketing, reservations, and other related activities which, in Holiday's business judgment as to the long-term interests of the Brand System, support marketing, reservations, and other related functions. Holiday will make available and use Services Contribution funds computed on the basis generally applicable to licensees of the Brand System. Services Contributions are not intended to benefit any specific market or hotel. Holiday and its affiliates have no obligations to spend from Services Contributions, or otherwise, any amount fixed or proportionate to the amount of Services Contributions you pay, nor do Licensor or its affiliates have any obligation to ensure that Licensee benefits directly or proportionately from Services Contributions paid or expenditures made from collected Services Contributions.
Advertising or promotional support or funding may become available to SCH, Holiday or their affiliates from third parties on account of the totality of the activities of SCH, Holiday and their affiliates,
including hotels operated under the Brand System. Holiday, SCH or their affiliates can use or designate any of this support and/or funding to benefit their enterprises as a whole, in whatever proportion and manner as they decide reasonably promotes their enterprises as a whole, using reasonable good faith business judgment. This advertising and promotional support does not include the revenues SCH and its affiliates earn from licensing their intellectual property rights to co-branded credit card issuers, from granting access to the Loyalty Program to co-brand credit card issuers, or to certain amounts earned from credit card member acquisition fees and the sale of Loyalty Program points to third parties;
Source: Item 9 — LICENSEE'S OBLIGATIONS (FDD pages 68–69)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, Item 11 discusses the franchisor's assistance, advertising, computer systems, and training. Specifically, it mentions that Holiday (the franchisor) will use the "Services Contribution" (as detailed in Item 6) for marketing, reservations, and other related activities. These activities are determined by Holiday's business judgment to support marketing, reservations, and other related functions for the long-term interests of the Brand System.
Even Hotels emphasizes that these Services Contributions are not intended to benefit any specific market or hotel. Furthermore, neither Holiday nor its affiliates are obligated to spend a fixed amount or a proportion of the Services Contributions that a franchisee pays. They also have no obligation to ensure that a franchisee benefits directly or proportionately from these contributions or expenditures made from collected Services Contributions.
The FDD also notes that advertising or promotional support or funding may become available to SCH, Holiday, or their affiliates from third parties due to the overall activities of these entities, including hotels operated under the Brand System. Holiday, SCH, or their affiliates have the discretion to use this support and/or funding to benefit their enterprises as a whole, in whatever proportion and manner they deem reasonably promotes their enterprises, using reasonable good faith business judgment. This support does not include revenues from licensing intellectual property rights to co-branded credit card issuers or from Loyalty Program activities.
In summary, while the Even Hotels FDD outlines how the franchisor manages and utilizes advertising and promotional funds, it also makes clear that franchisees may not directly benefit from these activities and that the franchisor has significant discretion in how these funds are spent. Prospective franchisees should carefully consider these terms and ask the franchisor for more detailed information on how advertising and marketing strategies are developed and implemented.