Can IHG transfer or assign the Crowne Plaza license to another party?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee understands and acknowledges that the rights and duties set forth in this License are personal to Licensee, and that IHG has granted this License in reliance on the business skill, financial capacity, and personal character of Licensee (if Licensee is a natural person), and upon the owners, members, partners or stockholders of Licensee (if Licensee is an Entity). Accordingly, neither Licensee nor any immediate or remote successor to any part of Licensee's interest in this License, nor any Person which directly or indirectly owns an Equity Interest (as that term is defined below) in Licensee or this License, may sell, assign, transfer, convey, exchange, pledge, mortgage, encumber, lease or give away (each of the foregoing shall describe a "Transfer"), any direct or indirect interest in this License or Equity Interest in Licensee, except as expressly provided in this License. Any purported Transfer, by operation of law or otherwise, of any interest, collaterally or otherwise, in this License or any Equity Interest in Licensee not in accordance with the provisions of this License, shall be null and void and shall constitute a material breach of this License, for which IHG may terminate this License without opportunity to cure pursuant to paragraph 11. C of this License.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the rights and duties outlined in the license agreement are specific to the franchisee. IHG grants the Crowne Plaza license based on the franchisee's business skills, financial capacity, and personal character (or the qualities of the entity's owners if the franchisee is a business entity). Therefore, the franchisee cannot transfer any interest in the license without express permission, as doing so would be a breach of contract.
Specifically, the FDD states that neither the franchisee nor any successor can sell, assign, transfer, convey, exchange, pledge, mortgage, encumber, lease, or give away any direct or indirect interest in the license or equity interest in the franchisee, except as expressly provided in the license. Any attempt to transfer interest in the license without following the guidelines in the license, whether by law or otherwise, is considered invalid and a material breach of the agreement. This gives IHG the right to terminate the license without allowing an opportunity to remedy the situation.
This restriction is typical in franchising, as franchisors like IHG want to ensure that only qualified and approved individuals or entities operate under their brand name to maintain consistency and protect brand standards. Prospective Crowne Plaza franchisees should carefully review the specific provisions in the license agreement regarding transfer to fully understand the conditions under which a transfer may be permitted and the procedures that must be followed to obtain IHG's approval.