Is Crowne Plaza liable for funding delays caused by the franchisee or a third party?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
5.5 Funding Delays. We will not be liable for any delays in receipt of funds or errors in debit and credit entries caused by you or any Third Party, including, without limitation, any delay in settlement funding for a Card transaction from a Card Organization to us.
8.6 SOLE REMEDY FOR FUNDING DELAY. NOTWITHSTANDING ANYTHING IN THE AGREEMENT TO THE CONTRARY (INCLUDING BUT NOT LIMITED TO SECTION 15), IN THE EVENT OF ANY DELAY IN FUNDING TRANSACTIONS TO YOU FOR ANY REASON, OTHER THAN FOR ANY REASON DESCRIBED IN SECTIONS 5 OR 19.1, OUR SOLE LIABILITY TO YOU WILL BE TO PAY YOU INTEREST COMPUTED FROM THE DATE THAT WE WOULD HAVE FUNDED THE TRANSACTION, AS DESCRIBED IN SECTION 5, TO THE DATE THAT WE ACTUALLY FUND THE TRANSACTION AT THE RATE OF THE LESSER OF THE PER ANNUM RATE EQUAL TO BANK'S THEN CURRENT PRIME RATE PLUS TWO PERCENT (2%), BASED ON A 360 DAY YEAR OR (II) THE MAXIMUM RATE.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, Crowne Plaza will not be held liable for funding delays or errors that are a result of the franchisee's actions or those of a third party. This includes delays in settlement funding for card transactions from a card organization.
This means that if a Crowne Plaza franchisee experiences delays in receiving funds due to their own errors or the errors of a third-party payment processor, Crowne Plaza is not responsible for covering any losses or damages incurred as a result of those delays. The franchisee bears the risk of such delays.
However, in the event of any delay in funding transactions to the franchisee for any reason other than those described in Sections 5 or 19.1 of the agreement, Crowne Plaza's sole liability is to pay interest. This interest is calculated from the date the transaction should have been funded to the date it is actually funded, at a rate equal to the lesser of the bank's current prime rate plus two percent (2%) per annum (based on a 360-day year) or the maximum legal rate. This provides a limited form of compensation to the franchisee in specific delay scenarios.
It is important for prospective Crowne Plaza franchisees to understand these provisions regarding funding delays and to carefully review Sections 5 and 19.1 of the franchise agreement to fully understand the circumstances under which Crowne Plaza may or may not be liable for funding delays.