Under what ownership or operational arrangements are hotels considered 'Properties' related to the Customer (IHG) for a Crowne Plaza franchise?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
tel, Hotel site, or any Equity Interest in the Hotel or Equity Interest in Licensee to the proposed new owner occurs, then such transfer shall be considered an unauthorized transfer (an "Unauthorized Transfer"). If an Unauthorized Transfer occurs, it shall constitute a material breach of this License and an abandonment by Licensee of the franchise, and IHG shall be entitled to exercise all of its remedies under this License and applicable law, including, without limitation, its right to terminate this License pursuant to paragraph 11.C hereof.
G. Transfer of Real Estate.
If (i) the real property used in the operation of the Hotel is owned directly or indirectly by Licensee or by a natural person or an Entity that owns any Equity Interest in Licensee and (ii) Licensee or that natural person or Entity proposes to transfer all or a substantial part of such property to a third party, such transfer shall constitute a transfer under the provisions of this License requiring an application for a new license agreement, unless Licensee receives IHG's prior written consent for the transaction. Licensee may however, without IHG's consent, mortgage or otherwise grant a security interest in the real estate or other tangible assets of the Hotel (but specifically excluding this License or any right or interest herein) in connection with commercially reasonable financing for the Hotel with a third party bank or other commercial lending institution which is not a competitor of IHG or any of its Affiliates. The selling, offering for sale, or establishment or registration of any condominium, cooperative, flat, timeshare, fractional interest, or interval ownership or regime or any similar type of ownership or regime relating to all or any part of the Hotel is prohibited.
H. Management and Name of the Hotel.
Licensee must at all times retain and exercise direct management control over the Hotel's business. Licensee shall not enter into any lease, management agreement, or other similar arrangement for the operation of the Hotel or any part thereof (including, without limitation, retail, food and/or beverage service facilities) with any natural person or entity without the prior written consent of IHG in each instance.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 FDD, a hotel is considered a 'Property' related to IHG (InterContinental Hotels Group) under specific ownership and operational arrangements. If the real property used for the Crowne Plaza hotel's operation is directly or indirectly owned by the franchisee or an entity with equity interest in the franchisee, any proposed transfer of a substantial part of that property to a third party requires an application for a new license agreement, unless IHG provides prior written consent. This stipulation ensures IHG maintains control over the locations operating under the Crowne Plaza brand.
However, the franchisee can mortgage or grant a security interest in the real estate or tangible assets of the hotel without IHG's consent, as long as it excludes the franchise license itself. This exception allows franchisees to secure financing for the hotel's operations. The FDD strictly prohibits the selling, offering for sale, or establishment of any condominium, cooperative, timeshare, or similar ownership arrangement related to the hotel, ensuring the hotel maintains its integrity as a single-entity operation.
The franchisee must retain direct management control over the Crowne Plaza hotel's business at all times. Entering into any lease, management agreement, or similar arrangement for the hotel's operation with another party requires IHG's prior written consent. IHG's approval of such arrangements does not relieve the franchisee of their responsibilities under the license agreement. The franchisee must provide IHG with all requested information regarding the ownership, control, and management of the hotel and the franchisee entity, allowing IHG to monitor compliance and maintain brand standards.