What is the length of the license term for a new development Crowne Plaza hotel?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
rooms or other goods or services that are related to your Hotel business.
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
This table lists certain important provisions of the License and related agreements. You should read these provisions in the agreements attached to this disclosure document. See Exhibit B.
THE LICENSE RELATIONSHIP
| Provision | Section In | Summary | |
|---|---|---|---|
| Agreement | |||
| a. Length of the license term (Note 1) | License: 11.A | The term begins on the Effective Date and expires 20 years from date Hotel opens in the Brand System for a new development; 10 or more years from date Hotel opens in the Brand System for a conversion; and 10 or more years from Effective Date for a change of ownership or re-licensing. | |
| b. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 87–91)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the license term for a new development hotel begins on the effective date and extends for 20 years from the date the hotel opens under the Crowne Plaza brand system. This is the standard term length, but it's important to note that the term length can vary for different circumstances such as a change of ownership or re-licensing.
For prospective franchisees, understanding the license term is crucial for long-term business planning. The 20-year term provides a substantial period to establish and operate the hotel, recoup investments, and generate profits. However, franchisees should be aware that the license does not provide for renewal or term extensions. If a franchisee wishes to continue operating under the Crowne Plaza brand after the initial term, they may need to negotiate a new license agreement, which could include materially different terms and conditions.
It is also important to note that the license term begins on the 'Effective Date,' which may precede the actual hotel opening date. Franchisees should clarify with Crowne Plaza what constitutes the 'Effective Date' and how it impacts the overall term, especially in relation to construction timelines and potential delays. This ensures a clear understanding of the operational period within the franchise agreement.
While the standard term is 20 years for new developments, potential franchisees should carefully review Item 17 of the FDD and the referenced sections of the license agreement to fully understand all the conditions related to the license term, termination, and transfer. Consulting with a franchise attorney is advisable to navigate these complex provisions and ensure a comprehensive understanding of their rights and obligations.