Under what specific Event of Default conditions can the Even Hotels agreement be terminated immediately without notice?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the occurrence of an Event of Default specified in subsections 12.3(b), 12.3(c), 12.3(d), 12.3(g) for any breach of Section 13, 12.3(i), or 12.3(k) (or for an Event of Default under Section 12.3(g) for failing to establish or maintain funds in a Reserve Account), the Agreement may be terminated immediately, without notice, and all amounts payable hereunder shall be immediately due and payable in full, provided that any disputed amounts shall be handled in accordance with Section 5.
Upon the occurrence of any other Event of Default, the Agreement may be terminated by the non-breaching party by giving written notice to the breaching party if the Event of Default remains uncured for thirty (30) days from the time the breaching party was first notified of the Event of Default, and upon such notice all undisputed amounts payable hereunder shall be due and payable on demand.
If any Event of Default occurs, regardless of whether such Event of Default has been cured, each party may, in its sole discretion, exercise all of its rights and remedies under Applicable Law, and the Agreement including, without limitation, exercising its rights under Section 13.
- 12.3 Events of Default.
Each event set forth below is an "Event of Default":
(a) A material adverse change in your business, financial condition, or business prospects.
(b) Any assignment of the Agreement by you in violation of Section 11.1.
(c) Any Material Change we did not consent to in violation of Section 11.2.
(d) Irregular Card sales by you, excessive Chargebacks, or any other circumstances which, in our sole discretion, may increase our exposure for your Chargebacks or otherwise present a financial or security risk to us.
(e) The occurrence of a Compromised Data Event (with respect to you) or a Data Security Event (with respect to us).
(f) Any of a party's representations, warranties, or covenants in the Agreement are breached in any respect.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to the 2025 FDD, the Even Hotels agreement can be terminated immediately without notice under specific Events of Default. These include any assignment of the agreement by the franchisee in violation of Section 11.1, any Material Change not consented to in violation of Section 11.2, irregular card sales, excessive chargebacks, or any other circumstances that, in the franchisor's sole discretion, may increase their exposure for the franchisee's chargebacks or otherwise present a financial or security risk to them.
Additionally, the occurrence of a Compromised Data Event (with respect to the franchisee) or a Data Security Event (with respect to the franchisor) can lead to immediate termination. Finally, any breach of a party's representations, warranties, or covenants in the agreement can also result in immediate termination.
These conditions highlight the importance of adhering to the terms of the franchise agreement and maintaining sound business practices. Prospective Even Hotels franchisees should carefully review these default conditions to understand their obligations and the potential consequences of non-compliance. It is also important to note that the franchisor has broad discretion in determining what constitutes a financial or security risk, so franchisees should maintain open communication and transparency with the franchisor to avoid any misunderstandings.