Under what circumstances will the Reserve Account for Even Hotels 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 Agreement.

This requirement means that if Even Hotels suspects fraudulent activity or if the franchisee defaults on their agreement, Even Hotels can demand immediate and full funding of the reserve account. This protects Even Hotels from potential financial losses resulting from the franchisee's actions or financial instability. An 'Event of Default' can cover a range of serious breaches of the franchise agreement, so franchisees need to understand what constitutes such an event.

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 time, and the franchisee is typically not entitled to interest on the funds held in the Reserve Account unless required by law.