What methods can be used to fund the Reserve Account for a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
13.2 Funding the Reserve Account.
(a) Timing. The Reserve Account shall be fully funded: (i) immediately in instances of fraud, suspected fraud, the occurrence of an Event of Default, or any party providing notice of termination of the Agreement; or (ii) upon three days' notice if required for any other reason.
(b) Method. The Reserve Account may be funded by all or any combination of the following: (i) one or more debits to your Settlement Account or any other accounts held by either of us or any of our respective Affiliates, at any financial institution maintained in the name of Client, any of its principals, or any of its guarantors, or if any of same are authorized signers on such account; (ii) our collection of any payments or amounts (including settlement funds) otherwise due to you; or (iii) with our consent, your delivery to us of a letter of credit issued by a financial institution acceptable to us and in a form satisfactory to us.
(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.
We will hold funds pursuant to this Section 13.2 in master account(s) with your funds allocated to separate sub accounts.
Unless specifically required by law, you shall not be entitled to interest on any funds held by us in a Reserve Account.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the Reserve Account can be funded through several methods. The timing for funding the Reserve Account varies depending on the situation. It must be funded immediately in cases of fraud, suspected fraud, an Event of Default, or if a party provides notice of termination of the Agreement. For any other reason, funding is required upon three days' notice.
Specifically, the Reserve Account may be funded by one or a combination of the following: debits to the franchisee's Settlement Account or other accounts held by either Crowne Plaza or its affiliates at any financial institution in the name of the franchisee, its principals, or guarantors (or if any of them are authorized signers on the account); Crowne Plaza's collection of payments or amounts otherwise due to the franchisee; or with Crowne Plaza's consent, the franchisee's delivery of a letter of credit issued by a financial institution acceptable to Crowne Plaza in a form satisfactory to them.
Crowne Plaza will hold any Reserve Account for the greater of ten months after the termination of the Agreement or for a longer period consistent with their liability for the franchisee's Card transactions and Chargebacks, in accordance with Card Organization Rules. After this period, any remaining amounts in the Reserve Account will be returned to the franchisee. Unless specifically required by law, the franchisee is not entitled to interest on any funds held in the Reserve Account.