What happens if Holiday determines that a Crowne Plaza franchisee is not qualified to operate the Hotel?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
d to operate the Hotel or unwilling or unable to: (1) comply with all requirements of Holiday under the License and the Standards, (2) cease operating the Hotel as a Holiday licensed Hotel once the License terminates or (3) treat the terms of the License as superior over any conflicting terms in the agreement between you and your management company.
Holiday may determine that you are not qualified to operate the Hotel, and if so, Holiday will require you to retain a management company to operate the Hotel. Normally, Holiday does not require that you engage it or one of its affiliates as the management company in order to obtain a License. Occasionally, because of the distribution of company managed hotels in a particular geographic area, or other factors, Holiday may determine that the development or conversion of a Hotel is appropriate only if one of its affiliates manages the Hotel. In that case, Holiday may condition the granting of a License on one of its affiliates managing the Hotel.
Holiday may require that you enter into an IHG Voice Reservation Service contract with Holiday's parent, SCH, if Holiday's Franchise Approval Committee determines its approval of your application should be conditioned upon one or more of those services being obtained (see Item 6, Notes 21 and Exhibits G-1 to this disclosure document).
If you hire a management company, General Manager, Director of Sales, and/or F&B Director or Regional Director of Operations to operate the hotel for you, whether or not Holiday required you to hire these positions, you and any of your guarantors remain liable to Holiday and IHG Technology Solutions LLC under the terms of the License, the Master Technology Services Agreement and any Guaranty.
Holiday does not impose restrictions, nor does it require you to impose restrictions, on any of your employees. However, Holiday and you agree to comply with each other's reasonable requirements
concerning confidentiality of information. In particular, you may not disclose, without Holiday's written permission, information pertaining to Holiday's marketing and reservation programs that have not been disclosed to the public.
Even though any management company must be acceptable to Holiday, you remain solely responsible for the selection, conduct and performance of any required management company, General Manager and all staff members and employees and Holiday has no responsibilities or liability in connection with your selection and its, his or her conduct or performance.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 85–87)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, if Holiday determines that a franchisee is not qualified to operate the hotel, Crowne Plaza will require the franchisee to retain a management company to operate the hotel. While Crowne Plaza typically does not mandate that franchisees engage Crowne Plaza or its affiliates as the management company, there are exceptions. Due to factors such as the distribution of company-managed hotels in a specific geographic area, Crowne Plaza may require that one of its affiliates manages the hotel as a condition of granting the license.
Even if a management company is hired, the franchisee and any guarantors remain liable to Holiday and IHG Technology Solutions LLC under the terms of the License, the Master Technology Services Agreement, and any Guaranty. The franchisee is responsible for the selection, conduct, and performance of any required management company, General Manager, and all staff members and employees. Crowne Plaza has no responsibilities or liability in connection with the franchisee's selection and its, his or her conduct or performance.
Crowne Plaza requires that any management agreement between the franchisee and a management company be in writing and contain specific provisions. These provisions include the management company's agreement to abide by all rules, regulations, inspections, and requirements of Crowne Plaza. Additionally, the franchisee and the management company must cease operating the Hotel as a Brand System brand Hotel if the License terminates. The agreement must also state that the License prevails over the terms of the management agreement if there is any conflict in terms. Furthermore, both parties must agree that Crowne Plaza's consent to the management agreement or approval of the management company does not relieve the franchisee or any guarantor of any obligations under the License. Finally, the franchisee and the management company will keep the confidentiality of trade secrets and follow the in-term covenant not to compete.