Under the Even Hotels equipment lease agreement, what constitutes a 'Default' by the Equipment Lessee?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
The occurrence of any of the following will constitute a "Default" by Equipment Lessee: (a) nonpayment by Equipment Lessee when due of any amount due and payable under this Lease; (b) failure of Equipment Lessee to comply with any provision of this Lease, and failure of Equipment Lessee to remedy, cure, or remove such failure within twenty (20) days after receipt of written notice thereof from Company; (c) any statement, representation, or warranty of Equipment Lessee to Company in this Lease that is untrue as of the date made; (d) Equipment Lessee's becoming insolvent or unable to pay its debts as they mature, or Equipment Lessee making an assignment for the benefit of creditors, or any proceeding, whether voluntary or involuntary, being instituted by or against Equipment Lessee alleging that Equipment Lessee is insolvent or unable to pay its debts as they mature; (e) appointment of a receiver, liquidator, trustee, custodian or other similar official for any of the Equipment or for any property in which Equipment Lessee has an interest; (f) seizure of any of the Equipment; (g) default by Equipment evidencing an obligation of Equipment Lessee to Company or to any affiliate of The Coca-Cola Company, whether now existing or hereafter arising; or (h) Equipment Lessee taking any action with respect to the liquidation, dissolution, winding up or otherwise discontinuing the conduct of its business.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, there are several conditions that constitute a 'Default' by the Equipment Lessee under the equipment lease agreement. These defaults cover a range of issues from non-payment to insolvency.
The most straightforward default is the failure to pay any amount due under the lease when it is due. Additionally, if the Equipment Lessee fails to comply with any other provision of the lease, and does not remedy this failure within 20 days after receiving written notice from Even Hotels, this also constitutes a default. Any untrue statement, representation, or warranty made by the Equipment Lessee to Even Hotels in the lease also triggers a default.
More severe defaults include the Equipment Lessee becoming insolvent or unable to pay debts, making an assignment for the benefit of creditors, or having proceedings instituted against them alleging insolvency. The appointment of a receiver, liquidator, trustee, or similar official for the equipment or any property of the Equipment Lessee, or the seizure of any of the equipment, also constitutes a default. Finally, a default is triggered if the Equipment Lessee defaults on any obligation to Even Hotels or any affiliate, or takes any action to liquidate, dissolve, wind up, or discontinue its business.