What range of volatility is indicated in the Crowne Plaza valuation model?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
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EXHIBIT E1-1
EXHIBIT E1 LIST OF FRANCHISEES OPERATING AS OF DECEMBER 31, 2024
| Binomial | and Finnerty | |
|---|---|---|
| 2024 valuation model | ||
| Weighted-average share price (British pence) | 8,364.5 | 7,940.0 |
Crowne Plaza FDD - 4-15-25 (198)
| - | 4.20% | |
|---|---|---|
| Risk-free interest rate | ||
| Volatility(i) | - | 26.0% |
| Term (years) | 2.5 | 3.0 |
| 2023 valuation model | ||
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 FDD, Crowne Plaza's 2022 valuation model indicates a volatility range from 29% to 30%. The 2023 valuation model indicates a volatility of 26.0%.
Volatility, in this context, likely refers to the degree of variation in the share price used in the valuation model. A higher volatility percentage suggests a greater degree of fluctuation or uncertainty in the projected value, while a lower percentage suggests more stability.
Prospective Crowne Plaza franchisees should consider these volatility figures as indicators of risk or uncertainty associated with the financial projections used by the franchisor. It is important to understand the assumptions and methodologies behind these valuation models and how they might impact the franchisee's potential returns or investment risks. Franchisees should consult with financial advisors to fully understand the implications of these figures.