What is the purpose of the System Fund for Crowne Plaza and other IHG brands?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
"IHG System Fund Activities" means various activities and arrangements organized and operated by IHG and its Affiliates (as they deem appropriate, in their sole discretion) for the provision of loyalty marketing services, distribution marketing services, brand marketing services and other such marketing and related programs and services for Brand System Hotels and the IHG Portfolio Brand Hotels (as hereinafter defined). These activities may be conducted on a local, regional, national, continental or international basis for all, or a group of, IHG Portfolio Brand hotels. IHG and its Affiliates may modify, in their absolute discretion, the IHG System Fund Activities from time to time. IHG System Fund Activities may include (within IHG's and its Affiliates sole discretion) any purposes that benefit or include Brand System Hotels, as a whole, groups of Brand System Hotels, or other IHG Portfolio Brand Hotels. IHG and its Affiliates have no obligation to ensure that any particular IHG Portfolio Brand Hotel, or particular group of Brand System Hotels, including the Hotel, benefits from the IHG System Fund Activities on a pro-rata or other basis or that the Hotel will benefit from the IHG System Fund Activities proportionate to the contributions paid by Licensee. "IHG Portfolio Brand Hotel(s)" means any hotel, other lodging facility, chain, brand or hotel system, however named, that is constructed, converted to or operated under any brands owned, controlled or under the direction of IHG and its Affiliates, as they may be added to, deleted from or changed from time to time.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the IHG System Fund is used for various activities organized by IHG and its affiliates. These activities include loyalty marketing services, distribution marketing services, and brand marketing services. These services and programs are intended for Brand System Hotels and other IHG Portfolio Brand Hotels. IHG has the sole discretion to determine the specifics of these activities and can modify them as they see fit.
The activities funded by the IHG System Fund can be conducted on a local, regional, national, continental, or international level, and may benefit all or a group of IHG Portfolio Brand hotels. However, IHG and its affiliates are not obligated to ensure that any particular hotel, including a Crowne Plaza Hotel, benefits from these activities on a pro-rata basis or in proportion to the contributions made by the franchisee. This means that while a franchisee contributes to the fund, there is no guarantee that their specific hotel will directly benefit from the fund's activities.
For a prospective Crowne Plaza franchisee, this implies that a portion of their fees will go towards a collective fund managed by IHG, which supports marketing and loyalty programs across the IHG brand portfolio. While these programs aim to enhance the overall brand and attract customers, the direct benefit to an individual Crowne Plaza hotel may vary. Franchisees should consider this when evaluating the costs and potential returns associated with the franchise, understanding that the marketing and loyalty benefits are part of a larger, system-wide strategy.