How is the annual rent for the dispensing equipment calculated for a Crowne Plaza franchise?
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 the 2025 Crowne Plaza FDD, the annual rent for leased dispensing 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 the total installed cost of a piece of equipment is $1,000, the annual lease rate would be $240, excluding taxes. Rent is due monthly, and Crowne Plaza may use funds due to the franchisee to offset amounts owed under the lease.
If a Crowne Plaza franchisee fails to pay rent or any other amount required by the lease within 10 days of the due date, a late charge of 5% per month of the overdue payment will be applied, or a lesser amount if required by applicable law. The franchisee acknowledges that the rent does not fully compensate Crowne Plaza for its expenses in research and development efforts to improve fountain equipment or in providing the equipment to the franchisee.
Crowne Plaza provides the equipment to the franchisee for dispensing products of The Coca-Cola Company. If the equipment is a dispenser, it must be used for dispensing fountain beverage products of The Coca-Cola Company. If any valve is used for a competitive beverage, Crowne Plaza has the right to additional rent and charges for its costs of servicing such valve at a rate of not less than $300 per Dispenser per year. These conditions do not apply within the State of Wisconsin.