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Log In / Register | Apr 17, 2014

Choice Hotels Answers Questions on AAHOA

LEXINGTON, Ky. — After agreeing to loosen up on franchising practices that franchisees had criticized as lacking good faith and fair dealing, Choice Hotels was re-admitted into the Asian American Hotel Owners Association. The association had given the franchisor 90 days to cure its poor standards.

Blue MauMau asked Choice Hotels and Steve Joyce questions in regard to the separation and reuniting with AAHOA. A spokesperson from Choice emailed back answers to Blue MauMau's questions.

BMM: Critics say that Choice's new impact policy that will now apply to all franchisees is still smoke and mirrors because the impact analysis is a subjective exercise that ultimately depends on the judgment of the consultant who conducts the study. The consultant is in the pocket of and is trained by Choice. In addition, Choice still can ignore the impact study and has the ability to set up a hotel next to a franchise if it so wants. What's your take on this?

Choice: Choice Hotels impact policy is very transparent, on-line and in the FDD [Franchise Disclosure Document]. The policy is regularly reviewed by our associations and was reviewed last year by AAHOA. The consultants are qualified by being members of a professional society, the International Society of Hospitality Consultants, who have a strict ethics, experience and operational code. Additionally, the consultants are vetted through the associations and educated in a joint session with franchisees about the brands in order for them to make informed decisions. AAHOA asked if we would expand the list and we agreed to expand the list to additional qualified consultants.

BMM: What is Choice Hotel's diversity policy when it comes to franchise owners and their participation in providing strategic leadership and brand advice via the franchise advisory council? AAHOA says some 60 percent of Choice Hotel owners are AAHOA members. What does Choice Hotels do to make sure that your executive team, managers and your franchisee advisory council leaders understand and are on the same page with such a high percentage of Asian Americans as its hotel owners?

Choice: CHOC [Choice Hotel Owners Council], ELFA [EconoLodge Franchisee Association] and ROA [Roadway Owners Association] are all elected by their peers, who are representative of the franchisee community rather than appointed by the franchisor boards. Choice Hotel values diversity and has a dedicated department in our headquarters to help manage our diversity process including educational seminars that both Choice leadership and CHOC participated in last year.

BMM: How does Choice feel about independent franchisee associations? Would Choice Hotels encourage or would it try to stop an independent franchisee association if Choice hotel owners formed it? Under what circumstances would you support CHOC becoming a fully independent franchisee association?

Choice: ELFA is an independent association. CHOC and ROA are elected by franchisees, but part of Choice Hotels. The letter from AAHOA (pdf) outlines future actions.

BMM: What is Choice Hotel's view in regard to AAHOA's 12 points of Fair Franchising? What progress are you making? How will Choice better work with AAHOA to improve its franchising practices to look even better for franchisee buyers and conversions? Choice's franchise sales and conversions have been soft in 2011 and Q4 compared to the industry according to Robert W. Baird Senior Research Analyst David Loeb. What happened and how will you improve in 2012? [Editor's note: This last question was sent in to Choice on February 28, a day later than the other questions above, and received on March 1.]

Choice: Our team hasn't had time and will have to pass on that question for now. We are all on the Hill this week lobbying for franchise and hospitality issues. Also, those are AAHOA's points and they are best qualified to speak to them.

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AAHOA Ltr to Choice.pdf594.63 KB
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