Does the Crowne Plaza license agreement provide for renewal or term extensions?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. Renewal or | Not applicable (see | The License does not provide for | |
| extension of term | License: 11.A) | renewal or term extensions. | |
| c. Requirements for you to renew or extend | Not applicable (see License: 11.A) | The License does not provide for renewal or term extensions. If we agree to Re-license, you may be asked to sign a contract with materially different terms and conditions than your original contract. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 87–91)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the standard Crowne Plaza license agreement does not offer franchisees an option to renew or extend the term of their license. The initial license term varies depending on the type of hotel. For a new development or conversion hotel, the term expires 20 years from the date the hotel opens under the Crowne Plaza brand. For a change of ownership or re-licensing, the term is 10 or more years from the effective date.
While the standard license agreement does not include renewal options, the FDD indicates that a franchisee may be able to re-license their Crowne Plaza hotel. However, if Crowne Plaza agrees to re-license, the franchisee may be required to sign a new contract with terms and conditions that are materially different from the original agreement. This means that the terms of a re-license could be less favorable than the initial license.
In the franchise industry, it is common for franchise agreements to include options for renewal, allowing franchisees to continue operating under the brand if they meet certain conditions. The absence of a renewal option in the standard Crowne Plaza license agreement is a notable deviation from this practice. Prospective franchisees should carefully consider this aspect and discuss the possibility and terms of re-licensing with Crowne Plaza before entering into an agreement. Understanding the conditions under which a re-license might be granted, and what materially different terms to expect, is crucial for long-term planning.
Therefore, while franchisees cannot assume they can renew or extend their original agreement, they may have an opportunity to negotiate a new agreement at the end of the initial term. This new agreement, however, is not guaranteed and may come with different requirements and obligations.