What events constitute force majeure under the Crowne Plaza Agreement?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
10.4 Force Majeure. Neither. Except for payment of amounts due (unless Customer is unable to pay is caused because of a Force Majeure event), neither party will be liable for any delay, failure in performance, loss or damage due to fire, explosion, cable cuts, power blackout, earthquake, flood, strike, embargo, labor disputes, acts of civil or military authority, war, terrorism, acts of God, pandemic, civil unrest, acts of a public enemy, acts or omissions of carriers or suppliers, unanticipated acts of regulatory or governmental agencies or other causes beyond such party's reasonable control. If the force majeure event continues to prevent the performance of any Service Component for more than ninety (90) days, Eligible Participant may, upon notice to AT&T during the continuance of the force majeure event, terminate such Service Component so affected without liability for any termination fees, shortfall charges or cancellation charges.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, a force majeure event includes specific instances that excuse either party from liability for delays or failures in performance. These events encompass a range of occurrences, such as fire, explosion, cable cuts, power blackouts, earthquake, flood, strike, embargo, labor disputes, acts of civil or military authority, war, terrorism, acts of God, pandemic, civil unrest, acts of a public enemy, acts or omissions of carriers or suppliers, and unanticipated acts of regulatory or governmental agencies. The overarching condition is that these causes must be beyond the party's reasonable control. However, the obligation to pay amounts due is not excused unless the inability to pay is itself caused by a force majeure event.
For a prospective Crowne Plaza franchisee, this clause offers a degree of protection against disruptions caused by unforeseen and uncontrollable events. If a force majeure event prevents the performance of any service component for more than 90 days, the franchisee has the option to terminate the affected service component by providing notice to AT&T during the continuance of the event. This termination can occur without incurring liability for termination fees, shortfall charges, or cancellation charges.
This provision is fairly standard in franchise agreements, as it allocates risk in situations where external factors significantly impact business operations. It is important for a franchisee to understand the scope of events that qualify as force majeure and the procedures for invoking this clause, including the notification requirements and potential consequences such as service component termination. Franchisees should also note that the obligation to make payments is only excused if the force majeure event directly causes the inability to pay.