Can Crowne Plaza commingle the funds in the Reserve Account with other funds?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Any such funds, money, or amounts now or hereafter in our possession may be commingled with other funds of ours, or, in the case of any funds held pursuant to the foregoing paragraphs, with any other funds of other customers of ours.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, Crowne Plaza has the right to commingle funds held in the Reserve Account with other funds. Specifically, any funds, money, or amounts in possession of Crowne Plaza can be combined with other funds belonging to them or with funds from other customers. This commingling applies to funds held in accordance with the paragraphs outlined in the agreement.
This means that the funds in the Reserve Account, which are meant to cover potential obligations of the franchisee, are not necessarily held in a separate, segregated account. While Crowne Plaza will allocate the franchisee's funds to separate sub-accounts within master accounts, they retain the right to mix these funds with their own or those of other franchisees.
For a prospective Crowne Plaza franchisee, this commingling policy has implications for the security and availability of the funds held in the Reserve Account. While the FDD stipulates that the remaining amounts in the Reserve Account will be returned after a certain period, the commingling of funds means that these funds are subject to the financial risks and obligations of Crowne Plaza. It is important to note that the franchisee is typically not entitled to interest on any funds held in the Reserve Account unless specifically required by law.