Under what circumstances does the Liquidated Damages Payment on premature termination apply to an Even Hotels franchise?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Hotel leaves the Brand System while its IHG Connect Participation Agreement is still in effect, the licensee shall be liable for payment to IHG of an early termination fee equal to (X) the number of months remaining in the term of the term of the Participation Agreement multiplied by (Y) the monthly fees due under the Participation Agreement. Such payment is due within 30 days following the termination date. It is recommended that all Participation Agreements are renewed at expiration, as contracts that are out of term may be subject to price increases until renewed with the existing provider and or the Hotel signs up for a new provider change. Price increases are determined by the provider. All vendor equipment must be returned to the vendor within 30 days of the circuit disconnection or the Hotel will be subject to fees covering the cost of such hardware (i.e., Managed Router, NIDS, etc.).
Source: Item 6 — OTHER FEES (FDD pages 30–52)
What This Means (2025 FDD)
Based on the 2025 Even Hotels Franchise Disclosure Document, a liquidated damages payment applies if a hotel leaves the Brand System while its IHG Connect Participation Agreement is still in effect. In this case, the licensee is liable for an early termination fee paid to IHG. This fee is calculated by multiplying the number of months remaining in the Participation Agreement term by the monthly fees due under the agreement. The payment is due within 30 days following the termination date.
This policy impacts franchisees by creating a financial obligation if they terminate their franchise agreement before the IHG Connect Participation Agreement expires. It is designed to cover costs associated with the early termination of the internet service contract. This fee is separate from other potential termination fees or penalties that might be outlined elsewhere in the franchise agreement.
Prospective Even Hotels franchisees should carefully review the terms of the IHG Connect Participation Agreement, including the length of the term and the monthly fees, to understand the potential financial exposure. They should also consider this potential cost when evaluating the overall financial implications of the franchise agreement and the circumstances under which they might consider terminating the agreement early. Franchisees should also be aware that all vendor equipment must be returned within 30 days of circuit disconnection or the Hotel will be subject to fees covering the cost of such hardware.