What were the total OLCC fees collected by Crowne Plaza in 2023?
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 |
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Revenue recognition (continued)
OLCC Fees
On September 10, 2008, the Company entered into a Master Development and Sales and Marketing Licensing Agreement with OLCC and Global Access Exchange, LLC, a wholly owned subsidiary of OLCC, an unrelated party. Under that agreement and subsequent amendments, the Company licenses the Holiday Inn Club Vacation trademark to OLCC to allow the development of Holiday Inn-branded time-share resorts and the selling of time-share membership interests thereto under the Holiday Inn Club Vacation name. The agreement gives OLCC exclusive development rights for Holiday Inn-branded time-share resorts, subject to OLCC achieving certain development requirements. The current agreement, effective March 14, 2019, has a term of 100 years until December 31, 2118. Any time-share resort branded as a Holiday Inn Club Vacation time-share resort would be the subject of a separate site license agreement.
OLCC fees include a monthly payment by the time-share resorts equal to a percentage of the sales price for qualified time-share sales. In addition, OLCC fees include recurring monthly fees based on a percentage of gross rooms revenue for certain rooms used for transient reservations at the time-share resorts, subject to a minimum annual payment to the Company. OLCC fee revenue, being the 5% commission retained by the Company, is treated as variable consideration and recognized as the underlying time-share and room revenues occur. The Company recognized $1.6 million, $1.6 million and $1.4 million in fees from OLCC during the years ended December 31, 2024, 2023 and 2022, respectively.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the company collected $1,572,723 in OLCC fees during the year 2023. These fees are part of the total revenues reported by Crowne Plaza. The FDD also provides figures for OLCC fees collected in 2024 ($1,595,317) and 2022 ($1,380,619), showing a fluctuating trend in these collections over the three-year period.
The OLCC fees are derived from a Master Development and Sales and Marketing Licensing Agreement between the company and Orange Lake Country Club (OLCC). Under this agreement, Crowne Plaza licenses the Holiday Inn Club Vacation trademark to OLCC for developing Holiday Inn-branded time-share resorts. The agreement, which extends until December 31, 2118, grants OLCC exclusive development rights contingent on meeting certain development requirements.
The OLCC fees include a percentage of sales price for qualified time-share sales and recurring monthly fees based on a percentage of gross rooms revenue for transient reservations at the time-share resorts, subject to a minimum annual payment. Crowne Plaza recognizes revenue from these fees as the underlying time-share and room revenues occur, treating the 5% commission retained by the company as variable consideration. The FDD specifies that Crowne Plaza recognized $1.6 million in fees from OLCC during 2024, $1.6 million during 2023, and $1.4 million during 2022, which differs slightly from the total OLCC fees reported in the receipts table.
For a prospective Crowne Plaza franchisee, understanding the nature and stability of these OLCC fees is important, as they contribute to the overall revenue stream of the company. While the fees themselves may not directly impact franchisees, the performance of the time-share resorts and transient reservations can reflect on the brand's overall health and reputation. Franchisees may want to inquire about the specific terms of the agreement with OLCC and how these fees are projected to trend in the future.