When does a Crowne Plaza franchisee's obligation to pay for a Service Component begin?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
emark 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 Sta
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, franchisees are obligated to pay certain fees monthly. Specifically, the Crowne Plaza Hotel Marketing Association fee, which is set at $3.00 per room per month, is invoiced in advance. However, the actual payment for this fee is made in arrears, meaning it's paid after the service has been provided, along with all other invoiced fees. This fee is subject to change by the Crowne Plaza Hotel Marketing Association.
In practical terms, a new Crowne Plaza franchisee will receive an invoice for the Crowne Plaza Hotel Marketing Association fee at the beginning of each month, but they won't actually pay that invoice until the following month, along with any other fees they owe. This provides a slight delay between the invoice and the payment, which can help with cash flow management. It's important to note that this fee is mandatory, and the amount can be adjusted by the Crowne Plaza Hotel Marketing Association, so franchisees need to stay informed about any potential changes.
Furthermore, the FDD specifies that all fees, except for the Rooms Addition Fee or other fees not determined from Gross Rooms Revenue, must be accompanied by a monthly statement. IHG has the right to allocate any payments received towards any outstanding amounts owed by the franchisee. If any payment is not made when due, it constitutes a breach of the license agreement and will accrue interest at a rate of 1½% per month, or the maximum interest permitted by applicable law, whichever is less. Franchisees should be aware of these terms to avoid penalties and maintain compliance with the franchise agreement.