Is a Crowne Plaza franchisee allowed to pledge or encumber the equipment, and what happens to the equipment's ownership during the initial 48-month term?

According to Crowne Plaza's 2025 Franchise Disclosure Document, a franchisee is not allowed to pledge or encumber any of the equipment. The document specifies that the franchisee cannot pledge or encumber the equipment or the interest of HPFS (presumably a leasing or financing company) in the equipment in any manner, nor can they create or permit any levy, lien, or encumbrance, except those created by HPFS. This restriction protects the equipment's ownership and HPFS's interest in it.

During the initial 48-month term, the equipment remains the personal property of HPFS, regardless of whether it is attached to the real estate. The equipment will not become a fixture or part of the real property without HPFS's prior written consent. This provision ensures that HPFS retains ownership and control over the equipment during the specified term.

These stipulations are important for prospective Crowne Plaza franchisees to understand, as they dictate the financial and legal responsibilities regarding the equipment used in the franchise operation. The franchisee must also get IHG's written consent before relocating any equipment. Furthermore, the franchisee is responsible for insuring the equipment against all risks of loss, naming HPFS as a loss payee and additional insured, covering not less than the replacement value of the equipment.