Is a Crowne Plaza franchisee permitted to use the Merchant Account for illegal transactions?

According to the 2025 Crowne Plaza Franchise Disclosure Document, franchisees are explicitly prohibited from using the Merchant Account for illegal transactions. The FDD states that as part of the franchisee's obligation to comply with applicable laws, they agree not to use the Merchant Account and/or the Services for illegal transactions. Examples of such prohibited activities include those outlawed by the Unlawful Internet Gambling Enforcement Act, 31 U.S.C. Section 5361 et seq., or for processing and accepting transactions in certain jurisdictions pursuant to 31 CFR Part 500 et seq. and other laws enforced by OFAC.

This requirement underscores the importance of franchisees adhering to all legal and regulatory requirements related to financial transactions. It also highlights the potential legal and financial risks associated with non-compliance. Crowne Plaza franchisees must ensure that their business operations and use of the Merchant Account align with all applicable laws and regulations to avoid penalties or legal repercussions.

This clause protects both the franchisee and Crowne Plaza from legal issues related to illegal transactions. It is a standard practice in franchising to include such stipulations to maintain the integrity of the brand and ensure all franchisees operate within legal boundaries. Franchisees should seek legal counsel to fully understand their obligations and ensure compliance with all relevant laws.