Under what circumstances will the Reserve Account for an Even Hotels franchise be fully funded immediately?

According to Even Hotels' 2025 Franchise Disclosure Document, the Reserve Account must be fully funded immediately under specific circumstances. These circumstances include instances of fraud, suspected fraud, the occurrence of an Event of Default, or if any party provides notice of termination of the License Agreement.

This requirement means that if Even Hotels suspects a franchisee of fraudulent activity, or if the franchisee violates the terms of the agreement (an Event of Default), Even Hotels can demand immediate and full funding of the Reserve Account. Similarly, if either party decides to terminate the agreement, the Reserve Account must be immediately funded. This protects Even Hotels from potential financial losses resulting from the franchisee's actions or the termination itself.

The Reserve Account can be funded through debits to the franchisee's Settlement Account or other accounts, collection of payments otherwise due to the franchisee, or, with Even Hotels' consent, a letter of credit. Even Hotels will hold the funds for a period of at least ten months after the agreement terminates, or longer if needed to cover liabilities related to card transactions and chargebacks. The funds are held in a master account with sub-accounts allocated to each franchisee. Franchisees are not entitled to interest on the funds held in the Reserve Account unless specifically required by law.