What is included in the definition of 'Gross Rooms Revenue' for a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee will operate the Hotel so as to maximize Gross Rooms Revenue of the Hotel consistent with sound marketing and industry practice and will not engage in any conduct that reduces Gross Rooms Revenue of the Hotel in order to further other business activities.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, franchisees are expected to maximize Gross Rooms Revenue, aligning with sound marketing and industry practices. Franchisees must not engage in any conduct that reduces Gross Rooms Revenue to benefit other business activities.
While the FDD excerpt specifies the franchisee's obligation to maximize Gross Rooms Revenue, it does not explicitly define what constitutes Gross Rooms Revenue. The document mentions that royalty fees and technology fees are based on gross rooms revenue. It also mentions revenue includes rooms revenue and food and beverage sales, which are recognized when the rooms are occupied and food and beverages are sold.
To fully understand what is included in 'Gross Rooms Revenue,' a prospective Crowne Plaza franchisee should seek clarification from the franchisor. Specifically, they should inquire about which revenue streams are included (e.g., room sales, food and beverage, services) and how revenue is calculated, especially regarding potential inclusions like taxes, discounts, or complimentary services.