What were the total franchise royalty fees, including those from affiliates, collected by Crowne Plaza in 2022?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Ended December 31 | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| Revenues: | ||||
| Franchise royalty fees (Note 3) | $ 37,792,172 | $ 25,626,433 | $ 24,665,131 | |
| Franchise royalty fees from affiliate (Note 4) | 57,388 | 50,496 | 44,847 | |
| OLCC fees (Note 2) | 1,595,317 | 1,572,723 | 1,380,619 | |
| Total revenues | 39,444,877 | 27,249,652 | 26,090,597 |
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the total franchise royalty fees collected in 2022, including those from affiliates, amounted to $24,709,978. This figure is derived from two components: $24,665,131 in franchise royalty fees and $44,847 in franchise royalty fees from affiliates. These fees represent a crucial revenue stream for Crowne Plaza, generated from its franchising operations.
For a prospective Crowne Plaza franchisee, understanding these figures provides insight into the financial scale of the franchise system. Royalty fees are typically calculated as a percentage of gross rooms revenue, meaning that the more revenue a franchisee generates, the more they will pay in royalties. The fees from affiliates, while smaller, also contribute to the overall revenue picture and reflect transactions within the broader corporate structure.
It's important to note that these figures represent gross revenues before any deductions. As detailed in the FDD, Crowne Plaza may net certain expenses against franchise royalty revenue, such as amortization of contract assets. For example, in 2022, franchise royalty revenue was reduced by $9.8 million due to contract asset amortization. Therefore, while the gross royalty fees provide a general overview, the net revenue figures offer a more accurate representation of Crowne Plaza's actual earnings from franchise operations.
Prospective franchisees should carefully review the notes to the financial statements within the FDD to fully understand how franchise royalty fees are calculated and reported. Understanding the relationship between gross and net revenues, as well as the impact of related-party transactions, is essential for making an informed investment decision. Additionally, it is advisable to consult with a financial advisor to assess the implications of these fees on the franchisee's potential profitability.