What fees, fines, or charges will Crowne Plaza not pass through to the franchisee?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Co-op programs attributable to the Hotel, and all fees due in connection with mandatory marketing, technology, guest satisfaction, quality assurance, training, new hotel opening and other systems and programs established by IHG or its Affiliates relating to the Brand System; and an amount equal to any sales, trademark license, gross receipts or similar tax imposed on IHG and calculated solely on payments required hereunder, unless the tax is an optional alternative to an income tax otherwise payable by IHG.
Local and regional marketing programs and related activities may be conducted by Licensee, but only at Licensee's expense and subject to IHG's requirements and the Standards. Reasonable charges may be made for optional advertising materials ordered or supplied by IHG to Licensee for such programs and activities.
(7) Crowne Plaza Hotel Marketing Association. A fee in an amount equal to $3.00 per room, per month for mandatory participation in the Crowne Plaza Hotel Marketing Association. This amount is subject to change from time to time by the Crowne Plaza Hotel Marketing Association. Said fees shall be invoiced in advance, but paid in arrears along with all invoiced fees.
C. Additional Payment Terms.
IHG may, at its election at any time during the License Term, require Licensee to pay all outstanding fees by electronic funds transfer, direct account debit, ACH or other similar technology designed to accomplish the same purpose as may be designated by IHG. If IHG requires Licensee to make payments by any of the foregoing methods, Licensee agrees to make its payment in compliance with those
requirements and also to deposit and maintain at all times sufficient funds to cover all fees and payments that Licensee owes to IHG and its Aff
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
Based on the 2025 Crowne Plaza Franchise Disclosure Document, the franchisor outlines specific financial responsibilities for franchisees. Licensees are generally responsible for local and regional marketing program costs, including optional advertising materials ordered from IHG. Franchisees must also participate in the Crowne Plaza Hotel Marketing Association, which involves a fee of $3.00 per room per month, although this amount can change. IHG retains the right to require electronic payments for all outstanding fees. Franchisees are expected to maximize Gross Rooms Revenue.
However, the FDD includes amendments for franchisees in certain states like California, Maryland, Virginia, and Washington, which may alter the standard agreement. These amendments address inconsistencies with state franchise laws, particularly concerning termination, renewal, and franchisee rights. For example, in California, franchisors cannot modify a franchise agreement or require a general release in exchange for assistance during a declared state or federal emergency. In Washington, certain provisions that conflict with the Washington Franchise Investment Protection Act are superseded by the Act.
Therefore, while the FDD details various fees and payment terms, it also acknowledges that state laws can override certain provisions, potentially preventing Crowne Plaza from passing through fees or enforcing specific financial obligations if they conflict with those laws. Prospective franchisees should carefully review the state-specific amendments and consult with legal counsel to understand their rights and obligations in their particular state.