Under what conditions can the Crowne Plaza Equipment Lessee request the removal of equipment?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
Equipment Lessee may request the removal of any Equipment upon thirty (30) days prior written notice to Company, and in addition, Company may remove any piece of Equipment for any reason upon thirty (30) days prior written notice to Customer.
Removal of Equipment will not affect the term of any agreement between the parties.
If this Lease is terminated with respect to any piece of Equipment for any reason, other than Company removing a piece of Equipment without cause under this section, prior to 100 months from the Commencement Date for that piece of Equipment, Equipment Lessee will pay Company the actual cost of removal (including standard shipping and handling charges) and remanufacturing of that Equipment, as well as the unamortized portion of the costs of (i) installation, (ii) non-serialized parts (e.g., pumps, racks and regulators) and other ancillary equipment.
Collectively, removal costs and items (i) and (ii) are referred to as "unbundling costs." The terms of this Lease will continue in effect with respect to each piece of Equipment until the Equipment has been removed from Equipment Lessee's premises and will survive the expiration or termination of any agreement into which this Lease is incorporated.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza FDD, an Equipment Lessee can request the removal of leased equipment by providing the Company with thirty days prior written notice. However, if the lease is terminated before 100 months from the commencement date, and the termination isn't due to the Company removing the equipment without cause, the Equipment Lessee is responsible for covering the actual cost of removal, including shipping and handling, as well as the remanufacturing of the equipment.
These costs also include the unamortized portion of the costs of installation, non-serialized parts like pumps, racks, and regulators, and other ancillary equipment. These combined costs are referred to as "unbundling costs." It's important to note that the terms of the lease remain in effect for each piece of equipment until it has been removed from the Equipment Lessee's premises, even if any other agreements have expired or been terminated.
This clause has significant financial implications for a Crowne Plaza franchisee. Requesting equipment removal or terminating the lease early can result in substantial expenses for removal, remanufacturing, and unamortized costs. Franchisees should carefully consider the long-term implications of leasing equipment and factor in potential removal costs when making decisions about equipment needs and lease terms. It is also important to note that the Company can remove any piece of equipment for any reason with thirty days written notice to the Customer.