Can Crowne Plaza increase preauthorized payments to reflect increases in taxes?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
ade for optional advertising materials ordered or supplied by IHG to Licensee for such programs and activities.
(7) Crowne Plaza Hotel Marketing Association. A fee in an amount equal to $3.00 per room, per month for mandatory participation in the Crowne Plaza Hotel Marketing Association. This amount is subject to change from time to time by the Crowne Plaza Hotel Marketing Association. Said fees shall be invoiced in advance, but paid in arrears along with all invoiced fees.
C. Additional Payment Terms.
IHG may, at its election at any time during the License Term, require Licensee to pay all outstanding fees by electronic funds transfer, direct account debit, ACH or other similar technology designed to accomplish the same purpose as may be designated by IHG.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
Based on the 2025 Crowne Plaza Franchise Disclosure Document, there is no explicit mention of the brand's ability to increase preauthorized payments to reflect increases in taxes. However, the document does state that IHG may require franchisees to pay all outstanding fees by electronic funds transfer, direct account debit, ACH, or other similar technology. It also states that the franchisee must maintain sufficient funds to cover all fees and payments owed to IHG and its affiliates in a segregated bank account.
While the FDD does not directly address tax increases, it does state that a fee in an amount equal to $3.00 per room, per month for mandatory participation in the Crowne Plaza Hotel Marketing Association. This amount is subject to change from time to time by the Crowne Plaza Hotel Marketing Association.
Therefore, it is important for a prospective franchisee to clarify with Crowne Plaza under what conditions the brand can adjust payment amounts, specifically regarding taxes and how these changes would be communicated and implemented. It would also be prudent to understand if there are any limitations or regulations regarding such adjustments, especially in specific states like Washington, Hawaii, Rhode Island, Maryland, or North Dakota, which have amendments to the franchise agreement.