What was the total value of loan guarantees that Crowne Plaza had in place as of December 31, 2024?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
d:1) | (i) also the fair value of the deferred compensation plan liabilities.
The level 3 investment was an addition during the prior year and the increase in 2024 reflects a further addition. There were no material transfers into and out of Level 3 during the year and there has been no change to the fair value.
Notes to Consolidated Financial Statements (continued)
15. Performance guarantees
From time to time, the Company will grant a performance guarantee to encourage property owners to enter into a management agreement. The Company has two outstanding guarantees at December 31, 2024 (three at December 31, 2023 and four at December 31, 2022), all provided by wholly owned subsidiaries of the Company.
Under these guarantees, amounts will become payable if performance hurd
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, as of December 31, 2024, the company had $30.7 million in loan guarantees in place. These guarantees are related to loans made to facilitate third-party ownership of hotels operating under franchise or management agreements with Crowne Plaza. The FDD also indicates that as of December 31, 2023, the company had $50.2 million in loan guarantees.
The document specifies that while Crowne Plaza provides these guarantees, the likelihood of the company needing to make a payment under these guarantees is currently considered not probable. The largest single guarantee that Crowne Plaza had in place was $21.3 million, with the underlying loan maturing in 2029. Furthermore, should Crowne Plaza be required to fund any amount under these guarantees, the company would seek cross-indemnity for the other partners' share, which could mitigate their financial exposure.
Two of the loan guarantees contain covenants that provide assurance regarding Crowne Plaza's financial strength, and the company does not anticipate breaching these covenants. This suggests that Crowne Plaza has taken steps to manage the risks associated with these guarantees. For a prospective franchisee, this information indicates that Crowne Plaza is willing to provide financial support to third-party hotel owners to facilitate their entry into franchise or management agreements, but also that Crowne Plaza takes measures to minimize its potential financial exposure and ensure its own financial stability.