How long will Crowne Plaza hold funds in the Reserve Account after the termination of the Agreement?
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, Crowne Plaza will hold any Reserve Account funds for a minimum of ten months after the termination of the 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 length of time Crowne Plaza retains the funds depends on factors like potential liabilities from card transactions and chargebacks, which can vary depending on the franchisee's business history and practices.
For a prospective Crowne Plaza franchisee, this highlights the importance of understanding the terms related to card transactions and chargebacks. It would be prudent to maintain detailed records of all transactions and address any chargebacks promptly to minimize the holding period of the Reserve Account funds after termination. Franchisees should also clarify with Crowne Plaza the specific Card Organization Rules that might affect the holding period and understand how these rules apply to their particular business circumstances.