What are the specific obligations of a Crowne Plaza franchisee regarding the payment of the Loyalty Program Contribution, as detailed in Item 6, and how does this relate to the franchisee's obligations regarding the use of advertising materials?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
iday cannot make another discretionary increase again for 24 months after the expiration of the increase.
Note 3: Loyalty Programs: Your Hotel must participate in the loyalty program (the "Loyalty Program") for as long as SCH chooses to market a Loyalty Program. As of the date of this disclosure document, the Loyalty Program is marketed to consumers under the names "IHG One Rewards", and "IHG® Business Rewards". You must pay the Initial Marketing Contribution and Loyalty Program Contribution to SCH for the Loyalty Program. The Initial Marketing Contribution is payable only when your Hotel first enters Holiday's Brand System. SCH can change the Initial Marketing and Loyalty Program Contributions. The Loyalty Program is an incentive program that rewards members for frequent qualifying stays at all Crowne Plaza brand group hotels (and, as described in Holiday's separate disclosure documents, for Holiday Inn, Holiday Inn Express, Holiday Inn Resort, Hotel Indigo, Staybridge Suites, Candlewood Suites, EVEN®, avid®, voco®, Atwell Suites®, Vignette CollectionTM, , Garner, and InterContinental Hotels & Resorts brand group hotels as well as other hotel brands within the SCH hotel portfolio, including Kimpton® Hotels & Resorts).
The Loyalty Program includes alliances with airline and other partner loyalty programs. Through these alliances, IHG One Rewards members may choose to collect and convert their IHG One Rewards points into airline miles or other partner rewards, or choose to collect miles or other partner rewards automatically with each stay. SCH may add or delete airlines and partners within other industries from the IHG One Rewards Program.
SCH's Global Sales & Marketing department has established marketing relationships with airlines, rental car companies, banks and other types of companies, some of which include co-branding with IHG One Rewards. These alliances may produce revenue and income for SCH that do not result from any required purchases that you make.
The Loyalty Program Contribution is currently 4.55% of Qualifying Full Folio Revenue and 1.365% of Qualifying Room and Meeting Revenue. SCH can change these percentages in its sole judgment. Qualifying Full Folio Revenue includes: (a) Qualifying Room Rates (defined below), (b) charges for food and beverage, telephone, laundry and pay-per-view movies, including applicable taxes, when charged to the member's room regardless of whether a Qualifying Room Rate was paid, and (c) at the Hotel's discretion, any other items charged to the member's room not defined in the previous items (a) or (b).
Property management systems certified as compatible by the SCH Information Technology department provide Full Folio Revenue data to the Loyalty Program through an automated interface.
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, franchisees must participate in the brand's loyalty program, currently marketed as "IHG One Rewards" and "IHG® Business Rewards", for as long as SCH (presumably Six Continents Hotels, Inc.) chooses to market such a program. Franchisees are obligated to pay both an Initial Marketing Contribution and a Loyalty Program Contribution to SCH. While the FDD states that SCH can change these contribution amounts, it does not specify the exact amounts. The Loyalty Program rewards members for frequent stays at Crowne Plaza and other hotels within the SCH portfolio. The loyalty program also includes alliances with airlines and other partner loyalty programs, allowing members to convert points into airline miles or other rewards. SCH's Global Sales & Marketing department has established marketing relationships with various companies, some of which include co-branding with IHG One Rewards, which may generate revenue for SCH without requiring direct purchases from franchisees.
Regarding advertising, Crowne Plaza franchisees may conduct local and regional marketing programs, but only at their own expense and subject to Holiday's (likely referring to IHG or a related entity) requirements, including proper trademark usage. Holiday may charge franchisees for optional advertising materials ordered for these local programs. Additionally, all Crowne Plaza brand group Hotels must participate in the CP-HMA (Crowne Plaza Hotel Marketing Association), with payments starting within 60 days of the hotel opening. The CP-HMA develops and funds programs that directly benefit Crowne Plaza hotels. A fee of $3.00 per room, per month is required for participation in the Crowne Plaza Hotel Marketing Association. This amount is subject to change from time to time by the Crowne Plaza Hotel Marketing Association. Said fees shall be invoiced in advance, but paid in arrears along with all invoiced fees.
In summary, Crowne Plaza franchisees have mandatory obligations to contribute to the Loyalty Program and the CP-HMA. While franchisees have some autonomy in local advertising, it is subject to franchisor approval and potential charges for materials. The Loyalty Program contributions support a broader network of hotels and partners, while the CP-HMA focuses specifically on Crowne Plaza brand group hotels. Prospective franchisees should inquire about the current amounts of the Initial Marketing Contribution and Loyalty Program Contribution, as these are not specified in the provided excerpts.