How long will funds be held in the Reserve Account after the Crowne Plaza franchise agreement is terminated?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Holding and Return of Funds. Any Reserve Account will be held by us for the greater of ten (10) months after termination of the Agreement or for such longer period of time as is consistent with our liability for your Card transactions and Chargebacks in accordance with Card Organization Rules, at which time, we will return all remaining amounts in the Reserve Account to you.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, any funds in the Reserve Account will be held for a minimum of ten months after the termination of the Franchise Agreement. However, Crowne Plaza may hold the funds for a longer period if it is consistent with their liability for the franchisee's card transactions and chargebacks, as per Card Organization Rules. After this period, Crowne Plaza will return any remaining amounts in the Reserve Account to the franchisee.
This means that upon termination of the franchise agreement, a franchisee may not have immediate access to the funds held in the Reserve Account. The actual holding period can extend beyond ten months depending on potential liabilities related to card transactions and chargebacks. This extended holding period protects Crowne Plaza from potential financial risks associated with these transactions even after the franchise agreement has ended.
It is important for prospective Crowne Plaza franchisees to understand the terms and conditions related to the Reserve Account, particularly the circumstances under which funds are held and the duration for which they are retained after termination. Franchisees should factor this potential delay in accessing these funds into their financial planning, especially when considering the implications of terminating the franchise agreement.