What must a Crowne Plaza franchisee reimburse the franchisor for regarding chargebacks?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
7 Chargebacks
7.1 Chargebacks Generally. You must reimburse us for all transactions you submit that are charged back and all related amounts, including: (a) all Chargebacks; (b) all fees, fines, penalties, assessments, and other amounts related to disputing or arbitrating a Chargeback or failing to produce records within applicable time limits; and (c) all Chargeback Fees set forth on the Fee Schedule or elsewhere in the Agreement, regardless of whether a Chargeback is settled in your favor or the Cardholder's favor.
7.2 Disputing Chargebacks. You may dispute a Chargeback as provided in the Card Organization Rules, including any requirements for timely submission.
Our obligation to you respecting Chargeback disputes is limited to presenting your dispute to the appropriate Card Organization, to the limited extent required by Card Organization Rules.
We will not engage in direct collection efforts against Cardholders on your behalf.
The Your Payments Acceptance Guide contains additional details and requirements related to Chargebacks.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, franchisees are responsible for reimbursing the franchisor for all chargebacks related to transactions they submit. This includes not only the chargeback amounts themselves but also any associated fees, fines, penalties, assessments, and other related costs. These additional costs can arise from disputing or arbitrating a chargeback, or from failing to provide necessary records within the required timeframes.
Notably, Crowne Plaza franchisees are liable for these reimbursements regardless of whether the chargeback dispute is ultimately settled in their favor or in the cardholder's favor. This means that even if the franchisee successfully contests a chargeback, they may still be responsible for covering the fees and costs incurred during the dispute process. The FDD also mentions that the franchisee may dispute a chargeback as provided in the Card Organization Rules, including any requirements for timely submission.
Crowne Plaza's obligation regarding chargeback disputes is limited to presenting the franchisee's dispute to the relevant Card Organization, as required by the Card Organization Rules. Crowne Plaza does not engage in direct collection efforts against cardholders on behalf of the franchisee. The Your Payments Acceptance Guide is referenced as containing additional details and requirements related to chargebacks, suggesting franchisees should consult this guide for more comprehensive information on the chargeback process and their responsibilities.
In effect, this policy places the financial burden of chargebacks and related disputes squarely on the Crowne Plaza franchisee. Franchisees need to be diligent in preventing chargebacks through careful transaction processing and customer service, as well as be prepared to handle the financial implications of chargebacks should they occur.