Hotel Franchise Is Like a Marriage Between Two Parties
Hotel franchising is like a marriage between two people. Some marriages last a lifetime while few others are over within a short period. For the marriage to succeed, both parties have to fulfil their responsibilities and promises.
Similarly in a hotel franchise setup, the brand and the hotel, both have to fulfil their ends of the bargain. The brands have to deliver on their promises and claims. They have a responsibility towards the hotels operating under their flag. In most cases the brands charge heavy fees so they need to provide sufficient benefits.
The hotels should experience an increase in revenues, savings and bottom line. If that doesn’t happen the hotels may feel the money they are paying is not justified.
Again for a marriage to succeed, there needs to be fair dealings, transparency, honesty and a mutual care for each other. The brands have to be fair and not unscrupulous. They have to care about the growth of their franchisees rather than being solely focused on their own profits.
As in the case of marriage, when things don’t work out between the couple it ends up in divorce and separation, similarly things can take an ugly turn during franchise partnership. Hotels may not be satisfied with the benefits they are getting, they may not like the way they are being treated and they may feel the brand is pushing lot of unnecessary and expensive renovations and property upgrades down their throat.
In such cases when the hotel wants to get out of the partnership before the contract expires, they may have to pay heavy liquidation damages and go through lengthy and ugly court proceedings. Many hotels, in order to avoid these hassles, just endure the pain and suffering till their contract expires, which could last several years.
In order to avoid all these sufferings and hardships, hotels need to do their due diligence before they enter into a contract with any brand. The more homework they do at the beginning, the lesser the trouble they may go through later on. Below are some pointers for them:
1 – What Do You Want Vs What You Are Getting: In any marriage, compatibility can be very important. You don’t just get married to any person you meet on the street. You try to see whether a person is the right match for you or not.
Before you enter into any franchise contract you should list down all that you want from the brand. What do you want and expect, write it down on paper. Then when you are checking out any brand, list down all they are offering and compare to what you are getting vs what you wanted. This can help you decide whether a brand is a proper fit for you or not.
2 – Thorough Background Check – You also need to do a thorough background check about the brand. Does it live up to its promises? How is the feedback of the hotels who are associated with it? Do you see many successful hotels associated with that brand? If possible, personally meet and speak to some of the hotel owners who are franchisees of that brand. This will help you get firsthand feedback.
3 – Consult With Experts – You also need to consult with experts – people who have loads of experience and knowledge of not only the hotel industry but also the franchising sector. If you happen to know such experienced hoteliers you may approach them and discuss.
If you personally don’t know such people, you may want to join any good hotelier network where you can get a chance to meet other professionals and ask them questions or get mentor-ship from them. One such network is the Ace Hoteliers Club, you may want to check it out.
4 – Consult With Attorney – You should also check out the legal terms and conditions of the franchise contract before signing it. Discuss with your attorney the various conditions mentioned. Ponder carefully whether you are able or willing to fulfil all the things the contract requires of you.
Also check out what could be the financial and legal penalties you may have to bear if you cannot fulfil any requirement or want to get out of the contract for any reason.
Conclusion:
Avoid legal battles and financial losses by doing proper homework before you join.
The greater your homework before signing the contract, the better it can be for you later on. So don’t be lazy or hasty. Pay attention and carefully consider all important things, don’t overlook any detail that could pose problems afterwards.
Finally, we have a small suggestion for hoteliers. If you are looking for a fair and transparent brand you may want to have a look at Stay Express. Ours is an SBA approved company and we offer many excellent benefits to our franchisees.
The most important thing is we have short term contracts so that hotels can give us a try without getting trapped for many years. Another great attraction is our affordable and low pricing structure which can help hoteliers save thousands of dollars annually — all these savings will add up to your bottom line. Get in touch with us here – Fair, Affordable Hotel Franchising
This article was inspired by an interview of Sharif Khan on the ‘True Hotel Leaders‘ series, which you can access here, True Hotel Leaders – Sharif Khan