For Even Hotels, what is the 'Services Contribution' used for?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
- (e) if Holiday determines to do so, communicate to you improvements and developments in the Brand System, including developments in reservation services, marketing operations, and administrative technical and support functions, facilities and programs. Holiday may enter into arrangements with any other entity for developments to the Brand System and may use any of these facilities, programs, services or personnel in connection with the Brand System or in connection with any business activities of its parents, subsidiaries, divisions or affiliates; and
- (f) make available to you consultation and advice pertaining to problems you encounter in operations, facilities and marketing.
Services Contribution; Advertising, Marketing and Promotion:
Hotels that SCH owns and manages and all Brand System licensees must pay the Services Contributions specified in paragraph 3.B of the License and summarized in Item 6 of this disclosure document. Holiday will use these funds as it determines to develop, support and/or administer marketing, reservation and training programs.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 70–82)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the Services Contribution is primarily used for marketing, reservations, and other related activities that support these functions. Holiday, the parent company, determines how these funds are used based on the long-term interests of the Brand System. These activities can include loyalty marketing services, distribution marketing services, brand marketing services, and other marketing and related programs and services for Brand System Hotels and IHG Portfolio Brand Hotels. These contributions are pooled together with those from other hotels operating under IHG Portfolio Brands.
The funds are typically invested in activities that strengthen the Even Hotels brand, such as awareness advertising, research, and the development of new or improved services. However, they may also be used for tactical marketing initiatives focused on short-term revenue enhancement and seasonal marketing programs. The Services Contribution cannot be used for the costs of maintaining, repairing, modernizing, renovating, or upgrading the franchisee's hotel.
It's important to note that the Services Contributions are not intended to benefit any specific market or hotel directly or proportionately to the amount paid. Holiday has no obligation to spend any amounts on advertising in the vicinity of a franchisee's hotel, nor is there any obligation to expend amounts for marketing or reservation services greater than the amounts it receives from licensees. Holiday anticipates that all Services Contributions will be expended during the taxable year within which the contributions are made, with any year-end surplus or deficit sums carried over to the following year. Also, Holiday does not use any Services Contribution monies to promote the sale of licenses.
In the fiscal year ended December 31, 2024, the allocation of marketing funds was as follows: 49% for media, advertising, promotions, and marketing programs, 16% for sales, 6% for hotel performance support, 5% for administration, and 24% for other costs. This breakdown provides insight into how Even Hotels allocates these funds across various activities to support the brand and its franchisees.