Regarding Crowne Plaza, does IHG or its Affiliates have an obligation to ensure that a licensee benefits directly or proportionately from Services Contributions paid or expenditures made from collected Services Contributions?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
IHG will make available and use Services Contribution funds (as may be computed on the basis generally applicable to licensees of the Brand System) for various activities, including IHG System Fund Activities. IHG is not obligated to expend funds for marketing, reservations or related services in excess of the amounts received from licensees using the Brand System and those funds made available by IHG as set forth above. Services Contribution funds are not intended to benefit any specific market or hotel. IHG and its Affiliates have no obligations to spend from Services Contribution funds, or otherwise, any amount fixed or proportionate to the amount of Services Contributions Licensee pays, nor do IHG or its Affiliates have any obligation to ensure that Licensee benefits directly or proportionately from Services Contributions paid or expenditures made from collected Services Contributions. Local and regional marketing programs and related activities may be conducted by Licensee but only at Licensee's expense and subject to IHG's requirements. Reasonable charges may be made for optional advertising materials ordered or used by Licensee for such programs and activities.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, IHG and its Affiliates do not have an obligation to ensure that a licensee benefits directly or proportionately from Services Contributions paid or expenditures made from collected Services Contributions. IHG will make available and use Services Contribution funds for various activities, including IHG System Fund Activities. These funds are computed on a basis generally applicable to licensees within the Brand System. IHG is not required to spend more on marketing, reservations, or related services than the amounts received from licensees within the Brand System, including funds made available by IHG. These Services Contribution funds are not intended to benefit any specific market or hotel.
IHG has no obligation to spend any amount fixed or proportionate to the amount of Services Contributions a licensee pays. Furthermore, neither IHG nor its Affiliates are obligated to ensure that a licensee benefits directly or proportionately from these Services Contributions or expenditures made from collected Services Contributions. Licensees may conduct local and regional marketing programs and related activities at their own expense, subject to IHG's requirements. Reasonable charges may be applied for optional advertising materials ordered or used by the licensee for these programs and activities.
This means that as a Crowne Plaza franchisee, you contribute to a collective fund that IHG uses for system-wide benefits. However, there is no guarantee that your specific hotel will directly or proportionately benefit from these funds. The allocation of these funds is at IHG's discretion, based on their assessment of the long-term interests of the Brand System. This arrangement is common in franchising, where franchisees contribute to a common marketing fund, but the benefits may not be directly traceable to individual contributions.