What constitutes a change of ownership requiring a new license application for a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) IHG shall process such change of ownership application in accordance with IHG's then current procedures, criteria and requirements regarding fees, upgrading of the Hotel, financial capacity and guaranty requirements, curing of outstanding defaults, operational abilities and capabilities, prior business dealings, market feasibility and other factors deemed relevant by IHG. If such change of ownership application is approved by IHG, the new owner and IHG
shall, upon termination of this License by IHG, enter into a new license agreement on IHG's then current form. The new license agreement shall contain IHG's then current terms (except for duration, which shall not be less than the remaining License Term but may be longer to reflect the new term agreed by IHG as part of the approval of the change in ownership of the Hotel), and if required by IHG, shall contain specified upgrading of the Hotel and other requirements.
- (2) Licensee must satisfy all of its accrued monetary obligations to IHG and its Affiliates, including an amount equal to a reasonable estimate of the costs and fees not yet accumulated and/or invoiced, and will execute (on Licensee's behalf and on behalf of its Affiliates), in a form prescribed by IHG, a general release of any and all claims against IHG and its Affiliates, and their respective officers, directors, agents and employees.
- (3) If a change of ownership application for the proposed new owner is either (a) not submitted or (b) not approved by IHG, and the conveyance of the Hotel, Hotel site, or any Equity Interest in the Hotel or Equity Interest in Licensee to the proposed new owner occurs, then such transfer shall be considered an unauthorized transfer (an "Unauthorized Transfer"). If an Unauthorized Transfer occurs, it shall constitute a material breach of this License and an abandonment by Licensee of the franchise, and IHG shall be entitled to exercise all of its remedies under this License and applicable law, including, without limitation, its right to terminate this License pursuant to paragraph 11.C hereof.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, a change of ownership necessitates a new license application that IHG (InterContinental Hotels Group) must approve. IHG will assess the application based on its current procedures, criteria, and requirements. These include fees, hotel upgrades, financial capacity, guaranty requirements, the curing of any outstanding defaults, operational abilities, prior business dealings, market feasibility, and other factors IHG deems relevant. If IHG approves the change of ownership, the new owner and IHG will enter into a new license agreement, upon termination of the existing license.
The new license agreement will be based on IHG's then-current form and terms, with the exception of the duration. The new term will not be shorter than the remaining term of the original license but may be longer if agreed upon during the approval of the ownership change. IHG may also require specific upgrades to the hotel and other requirements as part of the new agreement.
Furthermore, the existing Crowne Plaza licensee must fulfill all outstanding monetary obligations to IHG and its affiliates, including a reasonable estimate of costs and fees not yet invoiced. The licensee must also execute a general release of any claims against IHG and its affiliates, officers, directors, agents, and employees, in a form prescribed by IHG. If a change of ownership application is not submitted or is not approved by IHG, and the hotel, hotel site, or any equity interest is transferred to the proposed new owner, it will be considered an unauthorized transfer. This unauthorized transfer constitutes a material breach of the license and an abandonment of the franchise, which entitles IHG to exercise its remedies, including terminating the license.