Under what conditions will the Even Hotels Participation Agreement terminate?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.2 Termination or Expiration of the Hotel Agreement. If the Hotel Agreement terminates or expires, then this Agreement shall automatically terminate.
- 8.3 Termination or Expiration of IHG-HotelKey Agreement. If IHG's agreement with HotelKey relating to the PMS Solution terminates or expires, then IHG may, in its discretion, either (i) terminate this Agreement upon written notice to Hotel, or (ii) migrate Hotel to an alternative solution selected by IHG (the "Alternative Solution"). If IHG migrates Hotel to an Alternative Solution, IHG may amend this Agreement to incorporate any differing or additional terms required in connection with the Alternative Solution (the "Alternative Solution Terms"). IHG will provide Hotel with a copy of any such Alternative Solution Terms by written notice (the "Alternative Solution Notice"). If Hotel desires not to be migrated to such Alternative Solution, Hotel must provide IHG with written notice of its rejection of the Alternative Solution within thirty (30) days of the date of the Alternative Solution Notice. If Hotel fails to notify IHG of its rejection of the Alternative Solution within such thirty (30) day period, then Hotel will be deemed to have accepted the Alternative Solution and the Alternative Solution Terms.
- 8.4 Termination for Hotel Bankruptcy Event. HotelKey or IHG may terminate this Agreement, in whole or in part, immediately upon written notice to Hotel of a Hotel Bankruptcy Event.
- 8.5 Termination Fee. Upon termination of this Agreement before the end of the Initial Term for any reason, Hotel will pay to IHG a termination fee equal to (i) the monthly Implementation Fee, multiplied by (ii) the remaining months in the Initial Term.
- 8.6 Other Remedies. If any of the above events set forth in Section 8.1 through Section 8.4 occur, then IHG, in addition to or in lieu of exercising its termination or other, legal, equitable, or contractual rights, may direct HotelKey to limit, reduce, suspend, or terminate Hotel's use of or access to the PMS Solution.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to the 2025 Even Hotels Franchise Disclosure Document, several conditions can lead to the termination of a Participation Agreement. One condition is if the hotel agreement terminates or expires, the Participation Agreement will automatically terminate. Additionally, if IHG's agreement with HotelKey regarding the PMS solution ends, IHG can either terminate the Participation Agreement with written notice or migrate the hotel to an alternative solution. The hotel then has 30 days to reject the alternative solution, or acceptance is implied.
Another cause for termination is a Hotel Bankruptcy Event, which allows HotelKey or IHG to terminate the agreement immediately with written notice. Furthermore, the agreement can be terminated before the end of the initial term, but doing so requires the hotel to pay IHG a termination fee. This fee is calculated by multiplying the monthly Implementation Fee by the number of months remaining in the initial term.
IHG also has the option to limit, reduce, suspend, or terminate the hotel's access to the PMS Solution if any of the aforementioned events occur, in addition to or instead of exercising its termination or other legal rights. These terms are important for a prospective Even Hotels franchisee to understand, as they outline the circumstances under which their participation agreement can be terminated and the potential financial implications of such termination.