What happens if a principal of a Crowne Plaza licensee is convicted of a felony?

According to the 2025 Crowne Plaza Franchise Disclosure Document, if a principal stockholder, owner, member, or partner of a Crowne Plaza licensee is convicted of a felony, it can lead to significant repercussions. Specifically, if any of these individuals are convicted of a felony (or any other offense that could negatively impact the hotel, the Brand System, or IHG), it can be grounds for termination of the license agreement. This provision underscores the importance Crowne Plaza places on maintaining its brand's reputation and integrity.

This clause in the franchise agreement is fairly standard across the franchise industry, as franchisors need to protect their brand from damage caused by the actions of their franchisees or their principals. The FDD specifies that the offense does not necessarily have to be a felony to trigger this clause; any offense that could adversely affect the hotel, the Brand System, or IHG could also be grounds for termination. This broad language gives Crowne Plaza significant discretion in deciding whether to terminate an agreement based on a principal's actions.

For a prospective Crowne Plaza franchisee, this means that the background and conduct of all principal owners and stakeholders will be carefully scrutinized, and any criminal convictions (or even lesser offenses with potential reputational impact) could jeopardize their investment. It is crucial for potential franchisees to ensure that all individuals with a significant ownership stake in the franchise have a clean record and maintain a high standard of ethical conduct to avoid potential termination of the license agreement.