Under what circumstances will an Even Hotels licensee be required to pay an audit fee to IHG?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
el. Licensee will maintain an accounting system which fully and accurately reflects all financial aspects of the Hotel and its business. Such records shall include but not be limited to books of account, tax returns, governmental reports, register tapes, daily reports, and complete quarterly and annual financial statements (profit and loss statements, balance sheets and cash flow statements). The requirement to preserve records as set forth herein shall continue beyond the expiration or sooner termination of the License Term.
C. Audit.
IHG may require Licensee to have the Hotel's Gross Rooms Revenue and/or monies due hereunder computed and certified as accurate. During the License Term and for two years afterward, IHG and its authorized agents will have the right to verify information required under this License by requesting, receiving, inspecting and auditing, at all reasonable times, any and all records referred to above wherever they may be located (or elsewhere if reasonably requested by IHG). If any such inspection or audit discloses a deficiency in any payments due hereunder, and the deficiency in any payment is not offset by overpayment, Licensee shall immediately pay to IHG the deficiency and interest thereon as provided in paragraph 3.C. along with an audit fee of $3,0
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, a licensee may be required to pay an audit fee to IHG if an inspection or audit reveals a deficiency in payments owed to IHG. This fee is in addition to covering the deficiency itself, plus interest.
Specifically, if IHG conducts an audit of the Hotel's Gross Rooms Revenue or other monies due and discovers underpayment, the Even Hotels licensee must immediately remit the deficiency plus interest. In addition to the deficiency and interest, the licensee will also be assessed an audit fee of $3,000, which IHG may increase.
However, if the audit does not reveal any deficiency in payments, no audit fee will be assessed to the Even Hotels licensee. Conversely, should the audit uncover an overpayment, IHG will credit this amount against future payments or promptly refund it to the licensee without interest.