For a Crowne Plaza franchise, can the Services Contribution be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the Services Contribution, a component of the IHG System Fund Contribution, cannot be used to cover the costs of maintaining, repairing, modernizing, renovating, or upgrading the hotel. The Services Contribution is a monthly fee, the amount of which is detailed in Item 5 of Attachment A.
Instead, Crowne Plaza typically invests the Services Contribution in activities that strengthen the brand. These activities include awareness advertising, marketing, sales, guest services, reservations, standards, training programs, and research. The funds may also be used for developing new or improved services, associated products, and platforms, as well as tactical marketing initiatives focused on short-term revenue enhancement and seasonal marketing programs.
It is important to note that the Services Contribution does not cover the costs franchisees incur in acquiring, installing, or maintaining reservation services, equipment, or training. Additionally, franchisees are responsible for the costs associated with their own marketing activities. IHG and its affiliates bear no responsibility for these expenses.