How are assessment fees from Crowne Plaza hotel owners generally levied for the System Fund?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Assessment fees from hotel owners are generally levied as a percentage of hotel revenues but may also be volume-based or fixed monthly fees, and are recognized at the point the Company is entitled to raise the invoice.
The Company operates a System Fund (the "Fund") to collect and administer cash assessments from hotel owners for specified purposes of use including marketing, reservations, certain hotel services and the Group's loyalty program, IHG One Rewards. The Fund also benefits from certain proceeds from the sale of loyalty points under third-party co-branding arrangements and the sale of points directly to members and other third parties. The Fund is not managed to generate a surplus or deficit for the Company over the longer term but is managed for the benefit of the IHG System (hotels/rooms operating under franchise and management agreements together with IHG owned, leased and managed hotels/rooms, globally) with the objective of driving revenues for the hotels in the IHG System.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, assessment fees from hotel owners are generally levied as a percentage of hotel revenues. However, these fees may also be volume-based or fixed monthly fees. These assessment fees are recognized at the point that Crowne Plaza is entitled to raise the invoice.
The System Fund is used to collect and administer cash assessments from hotel owners for specific purposes, including marketing, reservations, certain hotel services, and the IHG One Rewards program. The fund also benefits from proceeds from the sale of loyalty points under third-party co-branding arrangements and the sale of points directly to members and other third parties.
The document specifies that the System Fund is not managed to generate a surplus or deficit for Crowne Plaza over the longer term. Instead, it is managed for the benefit of the IHG System, which includes hotels and rooms operating under franchise and management agreements, as well as IHG-owned, leased, and managed hotels and rooms globally. The objective of the System Fund is to drive revenues for the hotels within the IHG System.