Under the Even Hotels agreement, what is the consequence of violating the prohibition against competitive advertising?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.2 NO COMPETITIVE ADVERTISING. Except as otherwise permitted under the terms of this Agreement, Customer will not depict, advertise, promote or merchandise any Competitive Beverages anywhere in or in association with the Hotels.
Customer will not enter into any agreement or relationship whereby any Competitive Beverages are associated in any advertising or promotional activity of any kind with Customer, the Hotels, or any of the trademarks of Customer.
PRICING.
All prices quoted in this Agreement do not include, and each Hotel will be responsible for the payment of all applicable taxes, deposits, other government mandated fees, handling fees and recycling fees, as applicable.
CONFIDENTIALITY.
Neither party will disclose to any third party without the prior written consent of the other party, any information concerning this Agreement or the transactions contemplated hereby, except for disclosure (i) to any attorneys, accountants and consultants involved in assisting with the negotiation and closing of the contemplated transactions, or (ii) to Six Continents Hotels, Inc. or (iii) to affiliates of Company including Company's bottlers, or (iv) as required by Jaw.
A party that makes a permitted disclosure must obtain assurances from the party to whom disclosure is made that such party will keep confidential the information disclosed.
- **9.
OFFSET**.
If Customer owes any amounts to Company or Bottler under this or any other agreement, in addition to any other remedies it may have, Company may use funds due Customer to offset amounts due to Company under this or any other agreement.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
The 2025 Even Hotels Franchise Disclosure Document states that franchisees are prohibited from depicting, advertising, promoting, or merchandising any competitive beverages in association with the hotels, unless explicitly permitted by the agreement. Additionally, franchisees cannot enter into agreements that associate competitive beverages with the hotel or its trademarks in any advertising or promotional activities. However, the document does not explicitly state the consequences of violating this prohibition.
While the FDD excerpt does not specify the penalties for violating the competitive advertising clause, it does mention that if a franchisee owes any amounts to the company, the company may use funds due to the franchisee to offset the amounts owed. This offset provision could potentially be invoked if a franchisee violates the competitive advertising clause and incurs financial penalties as a result. However, without explicit details on the consequences, it's difficult to determine the exact repercussions.
Prospective Even Hotels franchisees should seek clarification from the franchisor regarding the specific consequences of violating the prohibition against competitive advertising. Understanding the potential penalties, such as fines, loss of marketing support, or other contractual remedies, is crucial for making an informed investment decision. Franchisees should also inquire about the process for resolving disputes related to this clause and any potential appeal mechanisms.