What does the Loyalty Program Contribution for a Crowne Plaza franchise cover, and how is it calculated?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
ither as may be convened by IHG upon no less than 45 days' advance notice. IHG may, in its sole judgment, upon 30 days' prior notice, increase this Services Contribution by an amount not to exceed 1% of Gross Rooms Revenue (as such term is defined on Attachment "A") and such increase shall be effective for a period no longer than 12 months; provided that, in the event of such increase, IHG shall not make such a discretionary increase again for a period of 24 months after the expiration of any such increase.
- b. Loyalty Program Contribution. An Initial Loyalty Marketing Contribution and a monthly Loyalty Program Contribution, currently known as the "IHG One Rewards Fee" (or other guest loyalty and frequency program fee as it may be recharacterized from time to time) at the prevailing rate on qualifying room rates and other eligible hotel charges for each night of a hotel stay on which IHG One Rewards points or frequency miles (related to an airline frequency alliance program) are required to be awarded by the terms of the IHG One Rewards program. The current prevailing rate is set forth in Item 5 of Attachment "A".
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the Loyalty Program Contribution covers the costs associated with the IHG One Rewards program. This contribution, also known as the "IHG One Rewards Fee," is calculated as a percentage of qualifying room rates and other eligible hotel charges for each night a guest stays and earns IHG One Rewards points or frequency miles through an airline alliance program. The specific prevailing rate is detailed in Item 5 of Attachment "A" of the FDD.
For a prospective Crowne Plaza franchisee, this means that a portion of their revenue from eligible hotel charges will be allocated to fund the IHG One Rewards program. This program is designed to incentivize customer loyalty and drive repeat business to Crowne Plaza hotels. The franchisor, IHG, retains the right to modify the amounts and terms of this contribution at their discretion, which could impact the franchisee's operating costs.
It's important to note that the Loyalty Program Contribution is part of the broader "IHG System Fund Contribution," which also includes a Services Contribution. The Services Contribution is used for activities that strengthen the brand, such as advertising, marketing, and training programs. Franchisees should carefully review Item 5 of Attachment "A" to understand the current prevailing rate and any potential changes to the Loyalty Program Contribution, as these fees can significantly affect profitability.