What costs are specifically excluded from the estimated initial investment for a Crowne Plaza hotel?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
The total estimated initial investment does not include variables such real estate costs, contingency fees, finance charges, interest or debt service obligations. Additionally, we cannot predict (and encourage you to consider) the implications of public policy on inflation, tariff rates, impact of climate change, and commodity and other cost fluctuation due to immigration restrictions. You are encouraged to independently investigate and carefully review the cost of all items and services with your own business and legal advisors before purchasing the license.
Source: Item 7 — Estimated Initial Investment (FDD pages 51–59)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the estimated initial investment of $17,378,326 to $80,742,850 (or $69,513 to $322,971 per guest room) for a 250-room Crowne Plaza or Crowne Plaza Suites hotel does not include certain costs. Specifically, the estimate excludes real estate costs, contingency funds, and other items that Holiday (presumably referring to IHG) cannot estimate.
This exclusion is significant for prospective franchisees because real estate costs can be a substantial portion of the total investment, and they vary widely based on location. Similarly, contingency funds, which are set aside for unforeseen expenses, are not included, meaning franchisees must be prepared to cover unexpected costs beyond the estimated range. The FDD acknowledges that there may be other items which Holiday is unable to estimate, further emphasizing the need for franchisees to conduct thorough due diligence and seek professional advice.
Crowne Plaza encourages prospective franchisees to independently investigate and carefully review the cost of all items and services with their own business and legal advisors before purchasing the license. Given the wide range of potential initial investments and the exclusion of major cost factors like real estate and contingency funds, it is crucial for franchisees to develop a detailed financial plan and secure adequate funding to cover all potential expenses.