What constitutes a 'transfer' by the franchisee of a Crowne Plaza license?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In | Summary | |
|---|---|---|---|
| Agreement | |||
| a. Length of the license term (Note 1) | License: 11.A | The term begins on the Effective Date and expires 20 years from date Hotel opens in the Brand System for a new development; 10 or more years from date Hotel opens in the Brand System for a conversion; and 10 or more years from Effective Date for a change of ownership or re-licensing. | |
| b. Renewal or | Not applicable (see | The License does not provide for | |
| extension of term | License: 11.A) | renewal or term extensions. | |
| c. Requirements for you to renew or extend | Not applicable (see License: 11.A) | The License does not provide for renewal or term extensions. If we agree to Re-license, you may be asked to sign a contract with materially different terms and conditions than your original contract. | |
| d. Termination by you | Not applicable | ||
| e. Termination by | License: Not | MTSA may be terminated by IHG Tech | |
| Holiday without | applicable | for convenience on 90 days’ prior | |
| Cause | MTSS: 10.1 | written notice to the licensee. | |
| f. Termination by Holiday with Cause (Notes 2 and 3) | License: 11.B, 11.C, 13.J and Attachment B MTSS: 10.3 | Holiday may terminate with cause. You pay liquidated damages if Holiday terminates under Paragraphs 11.B, 11.C, or 13.J. Termination may occur for failure to perform “The Work”. See Notes 2 and 4 and Exhibit B. | |
| g. "Cause" defined – | License: 11.B, | Any default other than those listed in | |
| defaults which can | “h” below. | ||
| be cured (Note 3) | See Note 2. | ||
| h. "Cause" defined – non-curable defaults | License: 10, 11.C and Attachment B | Non-curable defaults: bankruptcy; non- dismissed judgments exceeding $50,000; trademark misuse, or if you contest Holiday's ownership of trademarks; loss of possession of the property; dissolution of the licensee entity; failure to identify or operate the Hotel as a Brand System Hotel; violation of Licensor’s proprietary | |
| Provision | Section In Agreement | Summary rights; unapproved transfers; conviction of a felony; false books and records; failure to comply with safety, security or privacy of your guests or reputation standards; condemnation or casualty occurs and Hotel does not reopen when required; unauthorized use of Marks; and, refusal to allow inspection or audit. | |
| i. | Your obligations upon termination/ non-renewal | License: 7.A. 11.D, 11.E, 13.J and Attachment "B" MTSS,13.1 & Attachment 4-1 to Schedule 4 | Obligations include de-identification and payment of amounts due. |
| j. | Assignment of License by Holiday | License: 9.A | Holiday has rights of assignment to any person or legal entity. |
| k. | "Transfer" by you – definition | License: 9.B | Includes transfer of contract or assets (including real estate) or ownership changes. |
| l. | Holiday's approval of transfer by You | License: 9 | Holiday has the right to approve all transfers. |
| m. | Conditions for Holiday's approval of transfers | License: 9.C, 9.D, 9.E and 9.F | The prospective new owner of the Hotel or Licensee must submit an application and all fees to keep the Hotel in the Brand System. Holiday will evaluate the new owner's application using then-current procedures and criteria such as credit, operational abilities, market feasibility, prior business dealings and other factors it considers relevant. If Holiday approves the new owner, Holiday will require upgrading, signing of a License using the then-current form of License and the execution of a Guaranty. You must pay Holiday a non-refundable $25,000 processing fee at least 60 days before public offering, private placement or other sale of sec |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 87–91)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, a 'transfer' by a franchisee includes the transfer of the franchise contract itself, the transfer of the hotel's assets (including the real estate), or any change in the ownership of the franchise. This broad definition means that any significant change in control or ownership of the Crowne Plaza hotel operation is considered a transfer under the terms of the franchise agreement.
For a prospective franchisee, this definition is crucial because any of these actions requires approval from Crowne Plaza. Item 17 details that Crowne Plaza has the right to approve all transfers. This approval process is not a mere formality; Crowne Plaza will evaluate the prospective new owner based on factors such as creditworthiness, operational abilities, market feasibility, and prior business dealings.
Furthermore, the new owner may be required to upgrade the hotel, sign the then-current form of the Crowne Plaza license agreement, and execute a guaranty. The franchisee must also pay Crowne Plaza a non-refundable $25,000 processing fee at least 60 days before any public offering, private placement, or other sale of securities. This ensures that Crowne Plaza maintains control over who operates hotels under its brand and that the brand's standards are upheld.
Finally, if a franchisee receives an offer to purchase their Crowne Plaza hotel, they may be obligated to offer Crowne Plaza the right of first refusal to purchase the hotel on the same terms. This gives Crowne Plaza the option to acquire the hotel itself, further emphasizing the brand's control over its properties and network.