What does the term 'Equity Interest' mean in the context of the Even Hotels license agreement?

According to Even Hotels' 2025 Franchise Disclosure Document, the term "Equity Interest" is broadly defined within the context of the license agreement. It encompasses all forms of ownership in an entity or property. This includes, but is not limited to, membership, stock, partnership interests, and any other form of equity, whether legal or beneficial, voting or non-voting.

This definition extends to various types of interests such as stock interests, partnership interests, limited liability company interests, joint tenancy interests, leasehold interests, proprietorship interests, trust beneficiary interests, proxy interests, power-of-attorney interests, and all options, warrants, and any other forms of interest evidencing ownership or control. The FDD also clarifies that "publicly traded Equity Interests" refer to those traded on securities exchanges or quoted in electronic reporting services.

For a prospective Even Hotels franchisee, this definition is crucial because it impacts how changes in ownership or control of the franchise are handled. The franchisor, IHG, closely monitors equity interests to ensure compliance with the license agreement terms. Any transfer of equity interests may require IHG's approval and could trigger the need for a new license agreement. IHG also retains final judgment in defining equity interests and computing relative equity interests, especially concerning control, profit sharing, and financial risk exposure within the licensee's business.

This comprehensive definition ensures that Even Hotels, through IHG, maintains oversight over who ultimately controls and benefits from its franchises, safeguarding brand standards and consistency across its network. Franchisees must understand these stipulations to avoid inadvertently breaching the license agreement through unapproved transfers or changes in ownership structure.