For what liabilities is a Crowne Plaza franchisee responsible regarding card transactions submitted by unapproved assignees or after an unapproved Material Change?

According to Crowne Plaza's 2025 Franchise Disclosure Document, a franchisee is liable for specific financial obligations related to unauthorized actions concerning the franchise agreement. Specifically, the franchisee is responsible for all Chargebacks, Servicers Fees, Third Party Based Fees, and other liabilities that arise from card transactions. This liability applies in two scenarios: first, if the franchisee submits card transactions through an assignee or transferee of the agreement who has not been approved by Crowne Plaza; and second, if card transactions are submitted following a Material Change (such as a change in business nature) that Crowne Plaza has not approved in writing.

Crowne Plaza has the right to collect these owed amounts through various methods. These include offsetting or recouping against settlement funds, debiting the franchisee's Settlement Account, debiting a Reserve Account, or using any other collection method permitted under the agreement. This means Crowne Plaza has several avenues to recover these costs, potentially impacting the franchisee's revenue and cash flow.

This provision protects Crowne Plaza from financial risks associated with unapproved changes or transfers that could negatively impact the brand or its financial systems. For a prospective franchisee, it highlights the importance of obtaining written consent from Crowne Plaza before making any significant changes to the business or transferring the agreement to another party. Failure to do so could result in the franchisee being held financially responsible for any liabilities arising from card transactions processed under these unapproved circumstances.