For Crowne Plaza, what is the 'insurance receivable, net' comprised of?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
e at December 31, 2024 and 2023 is $240.5 million and $290.9 million, respectively. Impairment losses of $1.1 million, $0 and $0 were recognized on individual software assets during any of the years ended December 31, 2024, 2023 and 2022 respectively. In addition, $2.8 million, $0 and $0 were recognized within the System Fund.
In 2006, the Company entered into a 99-year finance lease on the InterContinental Hotel in Boston, Massachusetts, which is recorded in 'property and equipment' on the consolidated balance sheets. Assets capitalized related to this lease were $116.7 million
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the 'insurance receivable, net' is comprised of the cash surrender value of key man life insurance policies, reduced by any outstanding loan amounts against the policy.
The key man life insurance policies allow Crowne Plaza to offset outstanding loan amounts against the proceeds received when the policy matures or is cancelled. As of December 31, 2024, the accumulated cash surrender value was $33.0 million, which was reduced by outstanding loan amounts of $31.5 million. In the prior year, December 31, 2023, the accumulated cash surrender value was $31.9 million, reduced by loan amounts of $30.4 million.
These net insurance receivable assets are included within 'other assets' on Crowne Plaza's consolidated balance sheets. This means that while the gross value of the life insurance policies is significant, the net amount available to Crowne Plaza is lower due to the outstanding loans against them. A prospective franchisee should note that this receivable is an asset held by the parent company and not something directly impacting the operation of an individual franchised hotel.