What is the payment schedule for the Financing and Closing costs for a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | |||
|---|---|---|---|
| Royalty | 5% of Gross Rooms Revenue (“GRR”) | Monthly, on the 15th of the following month (Payable to Holiday) | Note 1 |
| Services Contribution | 3% of GRR | Same as Royalty | Note 2 |
| Initial Marketing Contribution for the Loyalty Program | $10.00 per approved guest room. | At same time as 1st Royalty Payment (one-time charge) (Payable to SCH) | Note 3 |
| Loyalty Program Contribution | 4.55% of Qualifying Full Folio Revenue from Loyalty Program members 1.365% of GRR on Qualifying Room and Meeting Revenue from Loyalty Program members | Same date as Royalty (Payable to SCH) | Note 3 |
| Capital Reserve | Up to 5% of Gross Revenue (see Paragraph 13.O of License). | Monthly if required by Holiday | Note 4 |
| Technology Services Fee | $17.40 per room, per month. | Monthly (Payable to SCH) | Note 5 |
| Revenue Management System: IHG Concerto™, Yielding & Price Optimization; or Revenue Analytics’ N2 Pricing | Costs of between $30 and $120 per month may apply for competitive rate insight shopping. For hotels currently subscribing to RevenueStrategy360, these costs may be waived. | Monthly (Payable to SCH) | Note 6 & Item 11 |
| TYPE OF FEE | |||
| AMOUNT $2,500 /standard • Fail fourth quarter = Assess $5,000/standard • Capped at $5,000 per quarter | DUE DATE | REMARKS | |
| Employee Engagement Survey | $7 to $12 per employee each year | Annually (Payable to designated third party provider) | Note 25 |
| F&B POS Support | $45.00 per workstation per month | Monthly (Payable to an approved supplier) | Note 7 |
| Comfort Letter Processing Fee | $2,500 for the preparation and processing of any mezzanine, replacement or subsequent comfort letters after the initial senior lender letter. | Upon Demand (Payable to Holiday) | IHG may waive this fee in its sole discretion. |
| Qualifying Room and Meeting Revenue includes Hotel revenue from accommodation (room only | |||
| booked on behalf of others via the IHG Business Rewards) and/or Hotel revenue from rental of guest | |||
| rooms, meetings, social, or catered events to include revenue from meeting room hire, food and | |||
| beverage, and/or other revenue associated with the meeting or event at the hotel’s discretion (formerly | |||
| known as IHG | ® Meeting Rewards) | . IHG® Business Rewards points are capped at 60,000 per meeting | |
| or event, while the Hotel has sole discretion to award more than 60,000 points for any such meeting or | |||
| event. | IHG One Rewards Measured Standards are | ||
| measured and enforced by the Loyalty Program to ensure consistency in the delivery of the program | |||
| to its members. Standards are based on calendar quarter thresholds. Hotels are measured at the end | |||
| of each calendar quarter for compliance. If a Hotel fails to meet the threshold for a quarter, it will have | |||
| ESTIMATE FOR A 250-ROOM CROWNE PLAZA OR CROWNE PLAZA SUITES HOTEL: | |||
| Type of Expenditure | Amount | Method of Payment and When Due | To Whom Payment Is to be Made |
| Application Fee | $125,000 | Lump sum with | H oliday |
| (Note 1) | application | ||
| Property Improvement Plan | $ 0 to $10,000 | Before you | H oliday |
| (“PIP”) fee | submit your | ||
| (Note 1) | application | ||
| Land (3 1/2 to 5 acres) | As required | 3rd parties | |
| (Note 2) | |||
| Building Construction | $9,952,000 to $ 66,419,000 | As required | 3rd parties |
| ( Note 2) (Note 3) | |||
| Furniture, Fixtures & Equipment (Note 2) | $5,414,900 to $ 8,171,000 | As required By suppliers | Suppliers |
| Financing and Closing | As incurred | 3rd parties | |
| (Note 2) |
Source: Item 6 — OTHER FEES (FDD pages 31–51)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the payment schedule for financing and closing costs is 'as incurred' and is to be paid to third parties. This means that franchisees will need to pay these costs as they arise during the financing and closing processes, rather than in a lump sum or according to a fixed schedule determined by Crowne Plaza.
For prospective Crowne Plaza franchisees, this implies that budgeting for these costs requires careful tracking of expenses as they accumulate. Franchisees should maintain detailed records of all financing and closing-related invoices and ensure timely payment to avoid delays in the opening of their Crowne Plaza location. These costs can vary significantly depending on factors such as the size of the loan, legal fees, and other professional services required to finalize the franchise agreement and secure financing.
While the FDD specifies that these costs are paid to third parties, it does not provide a detailed breakdown of what these costs might include. Therefore, it is crucial for potential franchisees to conduct thorough due diligence, consult with financial advisors and legal professionals, and obtain detailed estimates for all anticipated financing and closing expenses. Understanding the full scope of these costs and their payment schedule is essential for effective financial planning and management.