What is Crowne Plaza's accounting treatment for leases with a term of less than twelve months?

According to Crowne Plaza's 2025 Franchise Disclosure Document, the company does not apply the lease accounting model to leases with a term of less than twelve months. Instead, Crowne Plaza recognizes the costs associated with these short-term leases as an expense on a straight-line basis over the lease term.

For a prospective franchisee, this means that if you enter into any lease agreements with Crowne Plaza or its affiliates that are shorter than a year, the expenses will be evenly distributed and recognized throughout the duration of the lease. This approach simplifies the accounting for these leases, as it avoids the more complex calculations and reporting requirements associated with the lease accounting model.

This accounting treatment is fairly standard. By expensing these costs on a straight-line basis, Crowne Plaza ensures that the financial statements accurately reflect the expenses incurred during the lease term. Franchisees should be aware of this accounting practice when reviewing their financial obligations and planning their budgets.