What is the Crowne Plaza franchisee's obligation regarding funds erroneously credited, shipping and handling fees, and taxes, and what authorization does the franchisee grant to increase preauthorized payments for tax increases?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Errors, Shipping and Handling, Taxes, and Other Amounts. As part of your obligations, you agree to pay and reimburse us for all funds and deposits erroneously credited to your Settlement Account or Merchant Account, all shipping and handling fees related to Equipment and Supplies, and all Taxes (and you authorize us, or our respective assigns, to increase the amount of any preauthorized payment to reflect any increases in Taxes, and you waive any requirement for notice of such increase). In addition, you are fully liable for any transactions that you accept from a Cardholder that are of a type, including a Card type, that you did not elect for your Merchant Account, and must pay us all related Servicers Fees, Third Party Based Fees, and 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 paying and reimbursing the company for several financial obligations. These include funds and deposits that were erroneously credited to the franchisee's Settlement Account or Merchant Account, covering all shipping and handling fees related to equipment and supplies, and paying all taxes.
Furthermore, the Crowne Plaza franchisee grants authorization to the company or its assigns to increase the amount of any preauthorized payment to reflect any increases in taxes. The franchisee also waives any requirement for notice of such an increase. This means that Crowne Plaza can automatically adjust preauthorized payments to cover tax increases without prior notification to the franchisee.
This arrangement places a significant responsibility on the franchisee to ensure sufficient funds are available to cover these potential adjustments. It also means the franchisee must trust that Crowne Plaza will only increase the preauthorized payments accurately to reflect actual tax increases. A prospective franchisee should carefully consider the implications of this arrangement and seek clarification from Crowne Plaza regarding the procedures and safeguards in place to prevent errors or overcharges.