What was the 'System Fund and reimbursable expenses' for Even Hotels in the revised year 2?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
y, no such opinion is expressed.
- x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Atlanta, Georgia April 15, 2025
Consolidated Balance Sheets
(In Thousands)
| 2024 | 2023 | 2022 |
|---|
Consolidated Statements of Net Income (In Thousands)
| Year Ended December 31 | |||||
|---|---|---|---|---|---|
| 2024 | 2023 Revised ¹ | 2022 Revised ¹ | |||
| Revenues | |||||
| Fee business | $ | 896,837 | $ 869,949 | $ | 808,297 |
| Hotel operations | 92,579 | 88,417 | 78,787 | ||
| Other | 339,236 | 304,264 | 264,377 | ||
| System Fund and reimbursable revenues | 2,425,248 | 2,280,490 | 1,880,587 | ||
| Total revenues | 3,753,900 | 3,543,120 | 3,032,048 | ||
| Operating expenses | |||||
| Bad debt expense (release) (Note 2) | 9,170 | (1,988) | (3,495) | ||
| Property and other taxes, insurance and leases | 25,576 | 46,084 | 49,435 | ||
| Maintenance and repairs | 51,344 | 59,588 | 48,991 | ||
| General and administrative expenses | 574,738 | 563,909 | 414,334 | ||
| Other hotel operations | 9,038 | 7,798 | 7,397 | ||
| Mark-up cost charged by affiliated companies | 12,904 | 16,240 | 12,684 | ||
| Allocation of expenses to affiliated companies | (155,437) | (168,690) | (134,560) | ||
| Depreciation and amortization of software | 32,766 | 33,911 | 36,042 | ||
| Amortization of finite-lived intangible assets | 4,636 | 5,734 | 5,088 | ||
| Impairment loss |
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the System Fund and reimbursable expenses for the revised year 2 (which corresponds to 2022) totaled $1,988,196. This figure represents the expenses Even Hotels incurred related to the System Fund, which supports various brand-wide initiatives, and other reimbursable costs.
These expenses are part of the overall operating expenses for Even Hotels. Reviewing these figures helps prospective franchisees understand the scale of investment Even Hotels makes in maintaining and growing the brand. The System Fund is used for activities such as marketing, training, and technology development, all of which are intended to benefit franchisees by enhancing brand recognition and operational efficiency.
Understanding the components of the System Fund and reimbursable expenses is crucial for franchisees. It allows them to assess whether the expenses align with the services and support they receive from Even Hotels. Franchisees should also compare these expenses with those of other franchise systems to ensure they are receiving competitive value for their contributions. Additionally, franchisees should inquire about the specific allocation of these funds to understand how they directly benefit from these expenditures.