How is the annual rent calculated for equipment leased to a Crowne Plaza Customer?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
All equipment leased to Customer will be leased at an annual rate calculated by multiplying the total installed cost of equipment by the then-current lease factor, plus all applicable sales and use taxes, if any, as rent for the Equipment.
Rent will be due monthly.
At Company's discretion, Company may utilize funds due Customer to offset amounts due Company under this Lease.
If Customer fails to pay, within 10 days of its due date, rent or any other amount required by this Lease to be paid to Company, Customer will pay to Company a late charge equal to five percent (5%) per month of such overdue payment, or such lesser amount that Company is entitled to receive under any applicable law
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the annual rent for leased equipment is calculated by multiplying the total installed cost of the equipment by the then-current lease factor, plus any applicable sales and use taxes. Currently, the lease factor is 0.24. This means that if a piece of equipment costs $1,000 to install, the annual lease rate would be $240 (before taxes).
The lease payments are due monthly, providing a consistent expense for the franchisee. Crowne Plaza has the discretion to offset amounts owed to it under the lease with funds due to the franchisee. If a payment is more than 10 days late, Crowne Plaza may charge a late fee of 5% per month on the overdue amount, or a lesser amount if required by applicable law.
It is important to note that the equipment remains the property of Crowne Plaza, and the franchisee only has the right to use it. The franchisee is responsible for notifying Crowne Plaza of any changes in the equipment's location or any accidents involving the equipment. Additionally, the franchisee must use the equipment to dispense products of The Coca-Cola Company, and using it for competitive beverages may result in additional charges.