What does the IHG System Fund Contribution for a Crowne Plaza franchise consist of?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
(4) IHG System Fund Contribution. "IHG System Fund Contribution" means the assessments paid by Licensee, comprised of the Services Contribution and the Loyalty Program Contribution, for the IHG System Fund Activities (as defined in paragraph 4.G) to be provided by IHG and its Affiliates.
- a. Services Contribution. A monthly Services Contribution in the amount set forth in Item 5 of Attachment "A". The Services Contribution will typically be invested by IHG in activities that, in IHG's sole business judgment as to the long-term interests of the Brand System, strengthen the brand such as awareness advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services, associated products and platforms, but may also include tactical marketing initiatives more focused on short term revenue enhancement and seasonal marketing programs. The Service Contribution cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel. The Services Contribution does not include costs that Licensee incurs in the acquisition, installation or maintenance of reservations services, equipment or training, or in Licensee's own marketing activities. IHG and its Affiliates are not responsible for any of these costs.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 FDD, the IHG System Fund Contribution for a Crowne Plaza franchise is comprised of two components: the Services Contribution and the Loyalty Program Contribution. These contributions are used for IHG System Fund Activities, which are initiatives managed by IHG and its affiliates to provide loyalty marketing, distribution marketing, brand marketing, and other related programs for Brand System Hotels and IHG Portfolio Brand Hotels. These activities can occur at the local, regional, national, continental, or international level.
The Services Contribution is a monthly fee that IHG typically invests in activities that strengthen the Crowne Plaza brand. These activities include awareness advertising, marketing, sales, guest services, reservations, standards, training programs, and research. IHG may also use the Services Contribution for the development of new or improved services, associated products, and platforms, as well as tactical marketing initiatives focused on short-term revenue enhancement and seasonal marketing programs. However, the Services Contribution cannot be used for the maintenance, repair, modernization, renovation, or upgrading of the hotel itself.
It is important to note that IHG has the discretion to modify the IHG System Fund Activities from time to time and is not obligated to ensure that any particular Crowne Plaza hotel benefits from these activities on a pro-rata basis or in proportion to the contributions paid by the franchisee. Additionally, the Services Contribution does not cover the costs that the franchisee incurs in acquiring, installing, or maintaining reservations services, equipment, or training, or in the franchisee's own marketing activities. IHG and its affiliates are not responsible for these costs.