Who is responsible for chargebacks and adjustments associated with transactions submitted for processing under the Crowne Plaza agreement?

According to Crowne Plaza's 2025 Franchise Disclosure Document, the franchisee is responsible for all chargebacks and adjustments associated with transactions they submit for processing. This means that if a customer disputes a charge and the chargeback is successful, the franchisee will bear the financial loss. This responsibility extends to fraudulent activity processed through the franchisee's merchant systems, regardless of any Address Verification System (AVS) response received.

Furthermore, if a Card Organization determines that the franchisee or their Merchant Provider is the likely source of any data compromise event, the franchisee must promptly pay Crowne Plaza for all related expenses, claims, assessments, fines, losses, costs, penalties, and Issuer reimbursements imposed by the Card Organizations. This includes expenses and claims made by Issuers alleging the franchisee's responsibility for the data compromise event, even apart from any claim procedures administered by the Card Organizations.

Even after the termination of the franchise agreement, the franchisee remains responsible for all chargebacks, fees, and other amounts associated with transactions submitted during the term of the agreement. This ongoing liability underscores the importance of implementing robust fraud prevention measures and maintaining compliance with Card Organization rules throughout the duration of the franchise agreement. Franchisees should carefully review their statements and reports for any discrepancies or errors, notifying the franchisor in writing within 90 days to avoid being held responsible for inaccuracies they could have identified.

In the event that the franchisee's chargeback percentage exceeds the estimated industry chargeback percentage for their line of business, Crowne Plaza may charge an excessive chargeback fee for all chargebacks occurring in that month. This fee is in addition to the standard chargeback fees and any applicable handling fees or fines. The industry chargeback percentage is subject to change by Crowne Plaza to reflect changes reported by Visa, Mastercard, or Discover, adding a layer of potential financial risk for the franchisee.