For what activities will Holiday use the Services Contribution fee paid by Crowne Plaza franchisees?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
and security.
Note 5: If you are required to purchase subsequent training materials for any of the aforementioned training programs, Holiday estimates that such subsequent training materials will cost no more than a total of $5,000 per hotel for all trainees combined.
Other Assistance During the Operation of the Hotel:
After the opening of the Hotel (see Paragraph 4 of the License), Holiday will:
- (a) seek to maintain high standards of quality, cleanliness, appearance and service at all Hotels using the Brand System, to promote, protect and enhance the public image and reputation of the Crowne Plaza name, and to increase the demand for services offered by the Brand System. Holiday's judgment in these matters will be controlling in all respects, and Holiday will have wide latitude in making its judgments;
- (b) provide required and optional training programs at various locations, including Holiday's headquarters;
- (c) provide access to reservation services, if you are in compliance with your material obligations under the License;
- (d) use the "Services Contribution" (see Item 6) for marketing, reservations, and other related activities which, in Holiday's business judgment as to the long-term interests of the Brand System, support marketing, reservations, and other related functions. Holiday will make available and use Services Contribution funds computed on the basis generally applicable to licensees of the Brand System. Services Contributions are not intended to benefit any specific market or hotel. Holiday and its affiliates have no obligations to spend from Services Contributions, or otherwise, any amount fixed or proportionate to the amount of Services Contributions you pay, nor do Licensor or its affiliates have any obligation to ensure that Licensee benefits directly or proportionately from Services Contributions paid or expenditures made from collected Services Contributions.
Advertising or promotional support or funding may become available to SCH, Holiday or their affiliates from third parties on account of the totality of the activities of SCH, Holiday and their affiliates, including hotels operated under the Brand System. Holiday, SCH or their affiliates can use or designate any of this support and/or funding to benefit their enterprises as a whole, in whatever proportion and manner as they decide reasonably promotes their enterprises as a whole, using reasonable good faith business judgment.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 69–81)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, Holiday uses the Services Contribution fees it collects from franchisees for marketing, reservations, and other related activities that support these functions. These activities are determined by Holiday's business judgment regarding the long-term interests of the Crowne Plaza brand system. The funds are applied generally to licensees within the brand system and are not earmarked for specific markets or hotels. Holiday pools Services Contributions from Crowne Plaza brand group hotels together with the Services Contributions from hotels operating under one or more of Holiday's and its affiliates' current and/or future portfolio of brands. These Services Contributions will be distributed for marketing, reservations, IHG System Fund Activities (defined below), and other related activities which, in Holiday's and its affiliates' sole business judgment, support marketing, reservations and other related functions and/or purposes on a local, regional, national, continental or international basis for all, or a group of, IHG Portfolio Brands. "IHG System Fund Activities" means various activities and arrangements organized and operated by Holiday and its affiliates to provide loyalty marketing services, distribution marketing services, brand marketing services and other marketing and related programs and services for Brand System Hotels and the IHG Portfolio Brand Hotels.
For the fiscal year ended December 31, 2024, 49.0% of the marketing funds were allocated to media, advertising, promotions, and marketing programs, 16.0% to sales, 6.0% to hotel performance support, 5.0% to administration, and 23.0% to other costs. Holiday anticipates that all Services Contributions will be expended during the taxable year within which the contributions are made, with any year-end surplus or deficit carried over to the following year. It is important to note that Holiday does not use any Services Contribution monies to promote the sale of licenses.
Crowne Plaza franchisees should also be aware that Holiday has no obligation to spend any amount fixed or proportionate to the amount of Services Contributions a franchisee pays. Furthermore, neither Holiday nor its affiliates are obligated to ensure that a franchisee, their hotel, the Crowne Plaza brand, or any other particular IHG Portfolio Brand benefits directly or proportionately from Services Contributions paid or expenditures made from collected Services Contributions. This means that while franchisees are required to pay the Services Contribution, there is no guarantee of a direct or proportional return on that investment in terms of marketing or other benefits for their specific location.