What specific amounts related to chargebacks must a Crowne Plaza franchisee reimburse?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
7.1 Chargebacks Generally. You must reimburse us for all transactions you submit that are charged back and all related amounts, including: (a) all Chargebacks; (b) all fees, fines, penalties, assessments, and other amounts related to disputing or arbitrating a Chargeback or failing to produce records within applicable time limits; and (c) all Chargeback Fees set forth on the Fee Schedule or elsewhere in the Agreement, regardless of whether a Chargeback is settled in your favor or the Cardholder's favor.
6.5 Excessive Chargebacks. If your Chargeback percentage for any line of business exceeds the estimated industry Chargeback percentage, you shall, in addition to the Chargeback fees and any applicable Chargeback handling fees or fines, pay us an excessive Chargeback fee for all Chargebacks occurring in such month in such line(s) of business.
Your Chargeback percentage will be calculated as the larger of (a) the total Visa, Mastercard and Discover Chargeback items in any line of business in any calendar month divided by the number of Visa, Mastercard and Discover transactions in that line of business submitted that month, or (b) the total dollar amount of Visa, Mastercard and Discover Chargebacks in any line of business received in any calendar month divided by the total dollar amount of your Visa, Mastercard and Discover transactions in that line of business submitted in that month.
You are responsible for all Chargebacks, Third Party Based Fees, Servicers Fees, and other amounts arising from fraudulent activity processed through your Merchant Systems and/or your Merchant Account (regardless of any AVS response that you receive).
- 4.8 Costs. If you or a Merchant Provider (or other Third Party used by you) are determined by any Card Organization, regardless of any forensic analysis or report, to be the likely source of any loss, disclosure, theft or compromise of Cardholder data or Card transaction information or are determined to have caused Cardholder data to be put at risk (together, "Compromised Data Events") and regardless of your belief that you have complied with the Card Organization Rules or any other security precautions and are not responsible for the Compromised Data Event, you must promptly pay us for all related expenses, claims, assessments, fines, losses, costs, penalties, and Issuer reimbursements imposed by the Card Organizations against us (together, "Data Compromise Losses").
In addition to the foregoing, you must also pay us promptly for all expenses and claims made by Issuers against us alleging your responsibility for the Compromised Data Event, apart from any claim procedures administered by the Card Organizations.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, franchisees are responsible for specific amounts related to chargebacks. The franchisee must reimburse Crowne Plaza for all transactions that are charged back. This includes all chargebacks, fees, fines, penalties, assessments, and other amounts related to disputing or arbitrating a chargeback, even if the chargeback is settled in the franchisee's favor. These amounts also include all chargeback fees set forth on the Fee Schedule or elsewhere in the agreement.
Furthermore, if a Crowne Plaza franchisee's chargeback percentage for any line of business exceeds the estimated industry chargeback percentage, the franchisee must pay an excessive chargeback fee for all chargebacks occurring in that month for that line of business, in addition to the standard chargeback fees and handling fees or fines. The estimated industry chargeback percentage is subject to change by Crowne Plaza to reflect changes reported by Visa, Mastercard, or Discover.
The franchisee's chargeback percentage is calculated as the larger of two figures: (a) the total number of Visa, Mastercard, and Discover chargeback items in any line of business in any calendar month divided by the number of Visa, Mastercard, and Discover transactions in that line of business submitted that month, or (b) the total dollar amount of Visa, Mastercard, and Discover chargebacks in any line of business received in any calendar month divided by the total dollar amount of the franchisee's Visa, Mastercard, and Discover transactions in that line of business submitted in that month. This calculation method ensures that both the frequency and the monetary value of chargebacks are considered when determining whether a franchisee must pay excessive chargeback fees.
In addition to standard and excessive chargeback fees, the Crowne Plaza franchisee is responsible for all chargebacks, third-party-based fees, servicer fees, and other amounts arising from fraudulent activity processed through their merchant systems and/or merchant account, regardless of any AVS response received. If the franchisee or a merchant provider is determined to be the likely source of any loss, disclosure, theft, or compromise of cardholder data, 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. The franchisee must also pay promptly for all expenses and claims made by issuers against Crowne Plaza alleging the franchisee's responsibility for the data compromise event.