How does Crowne Plaza account for variable lease payments that do not depend on an index or rate?

According to the 2025 Crowne Plaza FDD, variable lease payments that are not dependent on an index or rate are recognized as an expense in the period over which the event or condition that triggers the payment occurs. This means that Crowne Plaza recognizes these expenses when the specific event or condition that causes the payment to be necessary takes place.

For a Crowne Plaza franchisee, this accounting practice means that these types of variable lease payments will impact the financial statements in the period they are incurred. This could include situations where lease payments fluctuate based on certain operational milestones or specific conditions related to the property.

This approach provides a transparent view of expenses, aligning them with the periods in which the related events or conditions occur, which can help franchisees better understand the factors influencing their financial performance. Franchisees should ensure they understand the terms of their lease agreements and how variable payments are determined to accurately forecast and manage their expenses.