Under what circumstances related to liquidated damages clauses might certain provisions be unenforceable for a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31 | ||
|---|---|---|
| 2024 | 2023 | |
| Beginning balance in allowance for credit losses | $ 44,963 | $ 52,355 |
| Current period charge (release) for expected credit losses | 9,170 | (1,988) |
| Current period charge (release) to System Fund | 4,658 | (1,608) |
| Write-offs charged against allowance | (4,231) | (4,127) |
| Foreign exchange differences and other | (1,103) | 331 |
| The ending balance in the allowance for credit losses | $ 53,457 | $ 44,963 |
| 2024 | 2023 | |
| Land | $ 6,105 | $ 13,771 |
| Building and improvements | 64,941 | 65,074 |
| Furniture, fixtures, and equipment (including computer | ||
| software) | 930,042 | 932,519 |
| Assets held under finance leases | 182,851 | 182,851 |
| 1,183,939 | 1,194,215 | |
| Less accumulated depreciation and impairment | (752,168) | (700,770) |
| Property and equipment, net | $ 431,771 | $ 493,445 |
Amendment To The Holiday Hospitality Franchising, LLC
Crowne Plaza, Crowne Plaza Suites, and Crowne Plaza Resorts License Agreement Pursuant To
The California Department of Financial Protection and Business Oversight
Notwithstanding anything to the contrary set forth in the above License Agreement ("License"), the following provisions shall supersede and apply to each License for an Crowne Plaza, Crowne Plaza Suites, and Crowne Plaza Resort issued in the State of California:
-
- In accordance with the provisions under the U.S.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, the enforceability of liquidated damages clauses can vary depending on the state where the franchise is located. For instance, in California, the amendment to the Crowne Plaza license agreement states that "Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable." This means that if a Crowne Plaza franchise is in California, certain provisions related to liquidated damages might not be enforceable due to state law.
Similarly, in North Dakota, the amendment specifies that "Liquidated damages and termination penalty provisions are deleted from the License Agreement to the extent they are prohibited by the laws of the State of North Dakota." This indicates that North Dakota law takes precedence, and if the state's laws prohibit or restrict liquidated damages, those clauses in the Crowne Plaza franchise agreement will be considered void.
These stipulations highlight the importance of franchisees understanding the specific state laws governing their franchise agreement. The enforceability of certain clauses, like those pertaining to liquidated damages, can significantly impact the financial obligations and rights of the franchisee. Therefore, prospective Crowne Plaza franchisees should consult with legal counsel to fully understand the implications of these state-specific amendments and how they affect their franchise agreement.