Under what specific Event of Default subsections can the Crowne Plaza Agreement be terminated immediately without notice?

According to the 2025 Crowne Plaza Franchise Disclosure Document, the License Agreement can be terminated immediately without notice upon the occurrence of specific Events of Default. These include events specified in subsections 12.3(b), 12.3(c), 12.3(d), 12.3(g) for any breach of Section 13, 12.3(i), or 12.3(k). Additionally, an Event of Default under Section 12.3(g) for failing to establish or maintain funds in a Reserve Account also allows for immediate termination without notice. In such cases, all amounts payable become immediately due.

For a prospective Crowne Plaza franchisee, this means that certain serious breaches of the agreement can lead to immediate termination of the franchise license. These breaches relate to unauthorized assignment of the agreement, unapproved material changes, irregular card sales or excessive chargebacks, and failure to maintain required reserve funds. The franchisee would not have a chance to correct these defaults before termination, which is a significant risk.

It is important to note that while the agreement can be terminated immediately for these specific defaults, any disputed amounts are to be handled according to Section 5 of the agreement. For other Events of Default not listed, Crowne Plaza is required to provide a written notice and a 30-day cure period before termination can occur. This immediate termination clause underscores the importance of adhering strictly to the terms of the franchise agreement to avoid potentially losing the franchise without warning.

This type of clause is not uncommon in franchise agreements, as franchisors often reserve the right to immediate termination for actions that severely impact the brand or financial stability. However, prospective franchisees should carefully review all Events of Default and understand the implications of each to avoid surprises and protect their investment.