Can Holiday require a Crowne Plaza franchisee to use one of its affiliates as the management company?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 the 2025 Crowne Plaza Franchise Disclosure Document, under normal circumstances, Holiday (the franchisor) does not require a franchisee to engage Holiday or one of its affiliates as the management company to obtain a license. However, in certain situations, Holiday may require a franchisee to use one of its affiliates as the management company.
Specifically, the FDD states that if Holiday determines that the development or conversion of a hotel is appropriate only if one of its affiliates manages the hotel, due to factors such as the distribution of company-managed hotels in a particular geographic area, Holiday may condition the granting of a license on one of its affiliates managing the hotel. This means that in some cases, a prospective Crowne Plaza franchisee might be required to have the hotel managed by a company affiliated with Holiday as a condition of receiving the franchise license.
This condition would be determined by Holiday and included in the License agreement. If Holiday requires the franchisee to hire a management company, General Manager, Director of Sales, or F&B Director, it may require that the franchisee hire this company or person within a specific period after signing the License or before the hotel opens. The franchisee must notify Holiday in the designated timeframe before hiring or changing any of these positions. Holiday may reject a proposed management company if it deems them inexperienced, unqualified, or unwilling to comply with Holiday's requirements under the License and Standards.