Under what conditions related to debt and insolvency can the Crowne Plaza license be terminated?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
and System. IHG's election to suspend the Hotel from said access rather than terminate this License will not: (i) constitute a waiver of any breach by Licensee or of any rights IHG otherwise has to terminate this License; (ii) constitute actual or constructive termination of this License; (iii) constitute an abandonment by IHG of this License; or (iv) entitle Licensee to any compensation of any kind for any alleged losses Licensee might incur as a result of said suspension.
- (5) IHG's notice of termination or suspension of services shall not relieve Licensee of its obligations under this License.
C. Immediate Termination by IHG.
This License may be terminated by IHG immediately (or at the earliest time permitted by applicable law) if:
(1) (a) Licensee or any Guarantor shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts, or shall make a general assignment for the benefit of creditors;
- (b) Licensee or any Guarantor shall commence any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property;
- (c) Licensee or any Guarantor shall take any corporate or other action to authorize any of the actions set forth above in paragraphs (a) or (b);
- (d) any case, proceeding or other action against Licensee or any Guarantor shall be commenced seeking to have an order for relief entered against it as debtor, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, and such case, proceeding or other
action: (i) results in the entry of any order for relief against it which is not fully stayed within s
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 FDD, Crowne Plaza can terminate a license immediately if the franchisee or any guarantor experiences certain debt-related or insolvency issues. These conditions include if the franchisee or guarantor generally fails to pay debts as they become due, admits in writing their inability to pay debts, or makes a general assignment for the benefit of creditors.
Termination can also occur if the franchisee or any guarantor commences any case, proceeding, or action seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors. This also applies if they seek the appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its property. Furthermore, Crowne Plaza can terminate the license if the franchisee or guarantor takes any corporate or other action to authorize any of the actions mentioned above.
Additionally, if a case, proceeding, or other action is commenced against the franchisee or any guarantor seeking an order for relief, reorganization, arrangement, adjustment, liquidation, dissolution, or composition of debts under bankruptcy, insolvency, reorganization, or relief of debtors laws, or seeking appointment of a receiver, trustee, custodian, or similar official, Crowne Plaza can terminate the license. This is applicable if the action results in an order for relief not fully stayed within seven business days or remains undismissed for 45 days. The license can also be terminated if an attachment remains on all or a substantial part of the hotel or the franchisee's or any guarantor's assets for 30 days. Finally, failure to discharge, vacate, or reverse a final judgment or tax lien exceeding $50,000 within 60 days, or to stay execution of it, can lead to termination. If appealed, the judgment must be discharged within 30 days after a final decision in the appeal is rendered.