When converting to a Crowne Plaza franchise, what costs are associated with renovation or upgrades?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
et forth in Item 4 of Attachment "A". Licensee agrees and acknowledges that additional royalties may be charged on revenues from any activity if it is added at the Hotel by mutual agreement and it is not now offered at Brand System Hotels generally or it is designed or developed by or for IHG or its Affiliates. The Royalty Fee is solely in consideration of our granting Licensee the franchise conferred by this License and is not in exchange for any goods, services or assistance which may be furnished by IHG.
- (4) IHG System Fund Contribution. "IHG System Fund Contribution" means the assessments paid by Licensee, comprised of the Services Contribution and the Loyalty Program Contribution, for the IHG System Fund Activities (as defined in paragraph 4.G) to be provided by IHG and its Affiliates.
- a. Services Contribution. A monthly Services Contribution in the amount set forth in Item 5 of Attachment "A". The Services Contribution will typically be invested by IHG in activities that, in IHG's sole business judgment as to the long-term interests of the Brand System, strengthen the brand such as awareness advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services, associated products and platforms, but may also include tactical marketing initiatives more focused on short term revenue enhancement and seasonal marketing programs. The Service Contribution cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel. The Services Contribution does not include costs that Licensee incurs in the acquisition, installation or maintenance of reservations services, equipment or training, or in Licensee's own marketing activities. IHG and its Affiliates are not responsible for any of these costs.
The Services Contribution is subject to change by IHG from time to time if either approved by: (i) a majority of members (which shall be counted on the basis of one hotel, one vote) of the Brand System who represent a majority of the hotels to be
subject to the increase; or (ii) a majority of the members of the Brand System or the "IHG Owners Association" (the franchisee association or successor sanctioned as such by IHG) at a meeting of Brand System licensees or at an annual IHG Owners Association meeting either as may be convened by IHG upon no less than 45 days' advance notice.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
Based on the 2025 Crowne Plaza Franchise Disclosure Document, the monthly Services Contribution paid by the franchisee cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the hotel. This contribution is invested by IHG in activities that strengthen the brand, such as advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services, associated products, and platforms. These activities are determined by IHG's business judgment regarding the long-term interests of the Brand System.
The Services Contribution also does not include costs that the Crowne Plaza franchisee incurs in the acquisition, installation, or maintenance of reservations services, equipment, or training, or in the franchisee's own marketing activities. IHG and its Affiliates are not responsible for any of these costs.
If a Crowne Plaza franchisee elects to lease additional equipment, the equipment will be leased at an annual lease rate calculated by multiplying the total installed cost of the additional equipment by the then-current lease factor. The lease factor currently in effect for equipment is 0.24. If the lease factor changes during the term, any equipment installed after the change goes into effect will be subject to the new lease factor. The then-current lease factor will remain in effect if the ownership and/or management of a Hotel changes. Lease charges, if any, will be invoiced, and any unpaid invoices by a Hotel will be handled in accordance with the Unpaid Invoice Procedure defined in Exhibit A-1, Section 5. All equipment provided by Company will at all times remain the property of Company and are subject to the terms and conditions of the Lease except as specifically changed by any of the Program Terms and Conditions or Standard Terms and Conditions of this Agreement.