Can the Services Contribution for a Crowne Plaza franchise be used for the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
a. Services Contribution. A monthly Services Contribution in the amount set forth in Item 5 of Attachment "A". The Services Contribution will typically be invested by IHG in activities that, in IHG's sole business judgment as to the long-term interests of the Brand System, strengthen the brand such as awareness advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services, associated products and platforms, but may also include tactical marketing initiatives more focused on short term revenue enhancement and seasonal marketing programs. The Service Contribution cannot be used to cover the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel. The Services Contribution does not include costs that Licensee incurs in the acquisition, installation or maintenance of reservations services, equipment or training, or in Licensee's own marketing activities. IHG and its Affiliates are not responsible for any of these costs.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the Services Contribution cannot be used for the cost of maintenance, repair, modernization, renovation, or upgrading of the Hotel. The Services Contribution is a monthly fee that Crowne Plaza franchisees pay, which IHG (InterContinental Hotels Group) typically invests in activities that strengthen the brand.
These activities, according to the FDD, include awareness advertising, marketing, sales, guest services, reservations, standards, training programs, research, and the development of new or improved services, associated products, and platforms. IHG may also use the Services Contribution for tactical marketing initiatives focused on short-term revenue enhancement and seasonal marketing programs.
It is important to note that the Services Contribution does not cover the costs that the franchisee incurs in the acquisition, installation, or maintenance of reservation services, equipment, or training, or in the franchisee's own marketing activities. IHG and its affiliates are not responsible for these costs, meaning the franchisee must cover these expenses separately. This is a fairly standard practice in franchising, where franchisees contribute to a system-wide fund for marketing and brand development, while remaining responsible for their own location-specific maintenance and upgrades.