Is a Crowne Plaza licensee permitted to initiate a lawsuit against someone who is allegedly infringing on the Crowne Plaza trademark?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee shall notify IHG immediately of (i) an infringement, or a challenge to Licensee's use of any of the Marks; (ii) any objections, demands,
controversies, allegations or actions asserted or taken by third parties involving any of the Marks or any part of the Brand System of which Licensee becomes aware; and, (iii) any potentially infringing or unauthorized uses of any of the Marks or any part of the Brand System of which Licensee becomes aware. IHG or its Affiliates will have the sole and exclusive right to handle disputes with third parties concerning use of all or any part of the Marks or Brand System, and Licensee will, at its reasonable expense, extend its full cooperation to IHG in all such matters. All recoveries made as a result of disputes with third parties regarding use of the Marks or Brand System or any part thereof shall be for the account of IHG. IHG need not initiate suit against alleged imitators or infringers, and may settle any dispute by grant of a license or otherwise. Licensee will not initiate any suit or proceeding against alleged imitators or infringers, or any other suit or proceeding to enforce or protect the Marks or Brand System.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, a licensee is generally prohibited from initiating lawsuits against alleged infringers of the Crowne Plaza trademark or Brand System. IHG (InterContinental Hotels Group) retains the sole and exclusive right to handle disputes concerning the use of the Marks or Brand System. The licensee is required to notify IHG immediately of any potential infringements or unauthorized uses of the Marks. The licensee must also fully cooperate with IHG in any related matters, at the licensee's own expense. Any monetary recoveries resulting from these disputes will be for the account of IHG. IHG, however, is not obligated to initiate a lawsuit against alleged infringers and may choose to settle disputes through licensing or other means.
This restriction ensures that IHG maintains centralized control over its brand and trademark enforcement. By preventing individual franchisees from pursuing legal action, IHG can ensure consistent and strategic management of its intellectual property rights. This approach is common in franchising, where the franchisor typically manages brand-related legal matters to protect the overall integrity and value of the brand.
However, there is an exception for Crowne Plaza franchises issued in the state of Washington. The FDD states that the provisions of the Washington Franchise Investment Protection Act will supersede any inconsistent terms in the license agreement or franchise disclosure document. This means that if the Act grants the licensee the right to bring an action in Washington courts, that right will prevail, notwithstanding the general prohibition in the license agreement. Therefore, a Crowne Plaza licensee in Washington may have the right to initiate a lawsuit under certain circumstances as provided by Washington law.
Prospective franchisees should be aware of this restriction and the exception for Washington franchises. It is important to understand that, in most cases, the franchisee will not have the power to independently pursue legal action to protect the Crowne Plaza trademark. Instead, they must rely on IHG to take appropriate action. Franchisees in Washington should familiarize themselves with the Washington Franchise Investment Protection Act to understand their rights in this area.