What actions can Crowne Plaza take if a franchisee experiences an Event of Default?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- DEFAULT.
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, trusfee, 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 Lessee under the terms of any note, document, agreement or instrument 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.
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- REMEDIES. Upon the occurrence of any Default or at any time thereafter during the continuance thereof, Company may terminate this Lease as to any or all items of Equipment, may enter Equipment Lessee's premises and retake possession of the Equipment at Equipment Lessee's expense, and will have all other remedies at law or in equity for breach of the Lease.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, several actions can trigger a default, leading to potential remedies for the company. These defaults include nonpayment of amounts due under the lease, failure to comply with any lease provision if not remedied within 20 days of written notice, or any untrue statement made by the franchisee in the lease. Further, insolvency, assignment for the benefit of creditors, or the institution of proceedings alleging insolvency against the franchisee also constitute default. The appointment of a receiver, seizure of equipment, or default under any obligation to The Coca-Cola Company or its affiliates can also trigger a default. Finally, any action to liquidate, dissolve, or discontinue the business also counts as an event of default.
Upon the occurrence of any of these defaults, Crowne Plaza has several remedies available. The company may terminate the lease for any or all items of equipment. Additionally, Crowne Plaza can enter the franchisee's premises and retake possession of the equipment at the franchisee's expense. Beyond these specific actions, Crowne Plaza retains all other remedies available at law or in equity for breach of the lease.
Prospective franchisees should carefully review the default and remedies sections of the franchise agreement to fully understand their obligations and the potential consequences of failing to meet them. The reference to The Coca-Cola Company suggests a pre-existing business relationship, and it is important to understand the full scope of potential cross-defaults. The remedies available to Crowne Plaza are broad, so franchisees need to be aware of all the ways they could potentially be in default and what actions Crowne Plaza can take as a result.