What is a Crowne Plaza licensee prohibited from implying regarding IHG's participation in the offering of securities?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
eath or mental incompetency of Licensee or any natural person with a Controlling Equity Interest in Licensee, such interest may be transferred in accordance with and subject to the terms of paragraph 9.F., provided that: (i) any such Transfer will be made within six (6) months of the date of death or mental incompetency, (ii) the obligations of Licensee under this License are satisfied pending the Transfer, and (iii) the Hotel will be continuously operated by Licensee or a management company approved by IHG.
E. Registration of a Proposed Transfer of Equity Interests.
Any public offering, private placement or other sale of securities in or by Licensee or the Hotel ("Securities") requires IHG's consent. All materials for the offer or sale of those Securities disseminated to any prospective purchaser thereof, filed with any governmental or quasigovernmental entity or intended for distribution to any form of media must be submitted to IHG for its review at least sixty (60) days before the date Licensee disseminates or distributes those materials or files them with any governmental agency, including any materials to be used in any offering exempt from registration under any securities laws. Licensee must submit to IHG a non-refundable Twenty-Five Thousand Dollar ($25,000) processing fee with the offering materials and pay any additional costs IHG may incur in reviewing such materials, including reasonable attorneys' fees. Except as legally required to describe the Hotel in the offering materials,
Licensee may not use any of the Marks or otherwise imply IHG's participation or that of its Affiliates, or any of their respective officers, directors, members, managers and employees in such offering or its/th
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, a licensee is restricted in implying IHG's participation in the offering of securities. Specifically, when offering or selling securities, the licensee cannot use the Crowne Plaza marks or imply that IHG or its affiliates are participating in or endorsing the securities offering.
This restriction extends to any officers, directors, members, managers, and employees of IHG and its affiliates. The FDD states that IHG has the right to approve any description of the license or the licensee's relationship with IHG in any materials used for the sale of securities. However, IHG's review of these documents does not indicate agreement with any statements, projections, or compliance with applicable laws.
Furthermore, the licensee must disclose in all securities offering materials that IHG is not an issuer or underwriter of the securities, and has no liability for financial statements or projections included in the offering. The licensee is solely responsible for the content of the offering materials and the operation of the business. Purchasers of securities must understand that their recourse for any issues related to the securities offering or the business operation is against the licensee, not IHG.
These stipulations protect IHG from liability and ensure that potential investors understand that IHG's involvement is limited to the franchise relationship and does not extend to the securities offering. A prospective Crowne Plaza franchisee needs to be aware of these limitations when seeking to raise capital through the sale of securities related to their hotel business.