For Even Hotels, what are 'unbundling costs' related to equipment removal?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
If this Lease is terminated with respect to any piece of Equipment for any reason, other than Company removing a piece of Equipment without cause under this section, prior to 100 months from the Commencement Date for that piece of Equipment, Equipment Lessee will pay Company the actual cost of removal (including standard shipping and handling charges) and remanufacturing of that Equipment, as well as the unamortized portion of the costs of (i) installation, (ii) non-serialized parts (e.g., pumps, racks and regulators) and other ancillary equipment.
Collectively, removal costs and items (i) and (ii) are referred to as "unbundling costs." The terms of this Lease will continue in effect with respect to each piece of Equipment until the Equipment has been removed from Equipment Lessee's premises and will survive the expiration or termination of any agreement into which this Lease is incorporated.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, 'unbundling costs' refer to the expenses a franchisee may incur if they terminate the equipment lease before 100 months from the commencement date. These costs include the actual cost of removing the equipment, encompassing standard shipping and handling charges, as well as the expense of remanufacturing the equipment.
In addition to the direct removal and remanufacturing costs, 'unbundling costs' also cover the unamortized portion of the initial installation expenses and the costs associated with non-serialized parts and other ancillary equipment. Non-serialized parts include items like pumps, racks, and regulators that are not individually tracked with serial numbers.
This means that if an Even Hotels franchisee decides to terminate the equipment lease early or if the lease is terminated for reasons other than the company removing the equipment without cause, the franchisee will be responsible for these 'unbundling costs.' This provision ensures that Even Hotels is compensated for the initial investment in equipment and installation if the lease is not maintained for the full 100-month term. The lease terms remain in effect until the equipment is fully removed from the franchisee's premises, even after the expiration or termination of any agreement into which the lease is incorporated.