For both managed and franchised Crowne Plaza hotels, under what condition are contractually reimbursable costs shown on a gross basis?

According to the 2025 Crowne Plaza FDD, certain costs relating to both managed and franchised hotels that are contractually reimbursable to the company are shown on a gross basis when the company is deemed to be acting as the principal provider of the related services.

For a prospective Crowne Plaza franchisee, this means that if Crowne Plaza is considered the primary party responsible for providing certain services to both managed and franchised hotels, the revenue and associated costs for those services will be reported on a gross basis. This accounting method reflects the total revenue and total expenses separately, rather than netting them together.

This distinction is important for understanding the financial reporting of reimbursable costs. If Crowne Plaza acts as an agent, they might report only the net amount (revenue less expenses). However, when they act as the principal, they report the full revenue and the full cost, providing a more transparent view of the scale of these reimbursable activities. Franchisees should seek clarification from Crowne Plaza regarding which specific services fall under this 'principal' designation to fully understand the financial implications.