What does 'Lease' refer to in the Crowne Plaza agreement?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
If Customer elects to lease additional equipment, such equipment will be leased to Customer at an annual lease rate calculated by multiplying the total installed cost of the additional equipment by the then-current lease factor. The lease factor currently in effect for equipment is 0.24. Should the lease factor change during the Term, any equipment installed after the change goes into effect will be subject to the new lease factor. For the avoidance of doubt, if the ownership and/or management of a Hotel changes, the then-current lease factor will remain in effect for that Hotel. Lease charges, if any, will be invoiced. Any unpaid invoices by a Hotel will be handled in accordance with the Unpaid Invoice Procedure defined in Exhibit A-1, Section 5. All equipment provided by Company will at all times remain the property of Company and are subject to the terms and conditions of the Lease except as specifically changed by any of the Program Terms and Conditions or Standard Terms and Conditions of this Agreement.
At a minimum, equipment provided pursuant to this Exhibit A-2 shall include at no cost to Customer in a quantity reasonably necessary for each Hotel:
Orange Juice Carafes
- ¾ Company will provide 2 cases (24 carafes) of Simply juice carafes to each Hotel in the Holiday Inn and Crowne Plaza brands in Year 1
- ¾ Company will provide a maximum of 1 additional case (12 carafes) for each Hotel in the Holiday Inn and Crowne Plaza brands in Year 2 through the remainder of the Term
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the term 'Lease' refers to the agreement under which franchisees may lease equipment, such as additional equipment or Dispensers, from the company. If a Crowne Plaza franchisee elects to lease additional equipment, they will be charged an annual lease rate. This rate is calculated by multiplying the total installed cost of the additional equipment by the then-current lease factor, which is currently 0.24. The equipment provided by the company remains the property of the company and is subject to the terms and conditions of the Lease, unless otherwise specified in the Program Terms and Conditions or the Standard Terms and Conditions of the agreement.
In states where leases without additional charges are not permitted, or if the franchisee chooses to lease additional Dispensers, the same lease rate calculation applies. The current lease factor for Dispensers is also 0.24. The franchisee will be invoiced for these charges, and any unpaid invoices will be handled according to the Unpaid Invoice Procedure outlined in the agreement. The Dispensers provided by the company remain the property of the company and are subject to the terms of the Lease, unless otherwise specified.
At a minimum, certain equipment is provided at no cost to the franchisee, in quantities reasonably necessary for each hotel. This includes items like Orange Juice Carafes, Fountain Equipment (except in portable bars), New Lines (as needed), and Bar Guns. The company also covers routine mechanical repairs, including line replacements and flavor changes/additions, for Dispensers at no charge, provided the franchisee uses the company's service network. However, special service calls are not considered routine and will be charged at the company's current rates, including labor, travel time, parts, and administrative costs.