Under the Even Hotels franchise agreement, what is the franchisee's responsibility regarding taxes and shipping fees?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.5 Taxes.
All Taxes resulting from the provision of the PMS Solution under this Agreement shall be the responsibility of Hotel.
If IHG or an IHG Affiliate is required to pay any such Taxes or penalties or interest relating thereto, IHG or an IHG Affiliate will provide an invoice for such amounts and Hotel will pay such amounts within thirty (30) days of the date of the invoice.
- 3.6 Withholding Taxes.
If Hotel is required to pay any applicable withholding tax payable to the relevant local tax authorities, Hotel shall (a) pay the applicable PMS Solution fee less the amount of the withholding tax; (b) make such required withholding tax payment to the local tax authorities; (c) within thirty (30) days after the date of payment of any
such withholding tax payment, provide IHG with the original or a certified copy of a receipt evidencing payment thereof to the relevant local tax authority; and (d) take all action reasonably required to enable IHG to obtain any tax credit which may be available to it.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to the 2025 Even Hotels Franchise Disclosure Document, the franchisee, referred to as 'Hotel' in the agreement, is responsible for all taxes resulting from the provision of the PMS (Property Management System) Solution under the agreement. If IHG (InterContinental Hotels Group) is required to pay any of these taxes, penalties, or interest, IHG will invoice the Hotel for those amounts, and the Hotel must pay the invoice within 30 days.
Additionally, if the Hotel is required to pay any applicable withholding tax to local tax authorities, the Hotel must pay the PMS Solution fee, less the withholding tax amount, to IHG. The Hotel is then responsible for making the required withholding tax payment to the local tax authorities. Within 30 days of paying the withholding tax, the Hotel must provide IHG with the original or a certified copy of the payment receipt as evidence. The Hotel must also take any action reasonably required to enable IHG to obtain any available tax credit.
The FDD excerpt does not mention any responsibilities of the franchisee regarding shipping fees. Therefore, it is recommended that prospective franchisees ask the franchisor about any potential shipping fees associated with operating an Even Hotels franchise.