Super 8 Responds to Newly Formed Owners 8 Association

From: John Valletta, President

Date: January 7, 2008

Subject: Owners 8 Association

As many of you know, a small group of Super 8® operators has organized an independent owners group called Owners 8 Association. Because the Web site of this group has been filled with distorted, inaccurate and misleading information, I felt it was time to provide you with some facts about our brand and its programs, and to respond to some of the false and derogatory allegations being made by that group.

First of all, let’s look at the big picture. The Super 8 brand has outperformed the rest of the chains in the economy segment by a wide margin over the past four years. According to Smith Travel Research data, since 2003, Super 8 occupancy has improved by 6.2 occupancy points and system RevPAR during that period improved by over 29%. Even more impressive is year to date system occupancy performance since 2005, which is up 3.2 points. During this same period of time, the rest of the economy segment chains saw occupancy decline by .1 point (one-tenth of one point). Super 8’s outstanding performance did not happen by accident.

The improvements you have made to your guestrooms, bathrooms, amenities, services and cleanliness all have contributed to this success. Because your improved revenues have resulted in more marketing dollars for the brand to spend, we have done an unprecedented amount of media advertising this past year. We put a field team of 31 DBDs out on the road and into your properties to assist you with operational support. We introduced the most revolutionary new room design ever in the economy segment, Project Innov8te, which is now being consumer-tested at 15 properties. And, within the next few months, at our spring regional training conferences, you will have your first look at our new brand identity and logo, and you will learn the details of the financial assistance program we will offer to help you with the costs of your new signs.

Now, back to the owners group Web site, which ignores the strong performance of our brand. From the tone of their Web site it would seem that the owners group is attempting to be very antagonistic toward the brand, distorting and misrepresenting the facts as well as completely overlooking the brand’s strong performance. In my experience, this kind of behavior usually only leads to a worsening of relations, rather than an improvement. This produces no positive results.

Of course, we cannot prevent franchisees from organizing their own owners group and we would not try. In fact, Super 8 always supports any legitimate effort to promote dialogue and discussion. Up to this point, I have watched the organizing efforts of this owners group from the sidelines, without comment. However, it is now apparent that the group is using tactics that are unfair to you, creating a hostile environment by posting patently untrue statements about our brand that do not promote productive dialogue but, instead, lead only to confusion and discord and damage the brand that we have all worked so hard to make successful.

What I will not continue to tolerate without rebuttal is the proliferation of misleading information and unsubstantiated allegations that this owners group is publishing and attributing to our Super 8 brand team, the Super 8 brand, the Super 8 Franchisee Advisory Board members and our parent company, Wyndham Worldwide Corporation.

As I am sure you can imagine, with a system the size of ours it doesn’t take long for a rumor to spread rampantly throughout the chain. I understand this, and that is why I always advise you to call one of us on the brand team whenever you have a question or need information about Super 8 and want an accurate and candid answer. In my five years as president of Super 8, my record of encouraging open communications and dialogue with Super 8 franchisees through meetings, open forums, personal visits and phone conversations is one of which I amextremely proud. It is especially gratifying to travel around the country visiting properties and meeting with owners and managers, sometimes scheduled and many times just to ‘drop in’ to say hello. During these past five years at our conventions and regional meetings, we have hosted dozens of open forums and town hall sessions for our owners. Since the advent of our Super 8 brand portal, MyPortal.com, over the past two years, we have been able to greatly expand our communications to you. As you know, we will soon add a new Question and Answer section to MyPortal and you will be able to submit questions and we will respond to them. I do my best to give a timely response to every voice mail, e-mail or letter you send me, with responses coming either directly from me or from an appropriate member of the Super 8 team. You may not always like the answers and we may not always agree, but we always communicate. The door has been open for five years and it will remain open.

While this owners group claims that one of its goals is to improve communication, it is disappointing that they indicate that they will achieve this through the efforts of a group of attorneys. If that is the case, those attorneys will only be allowed to speak to our corporate attorneys, not me. This will undoubtedly create a great deal of unnecessary legal expense for both the owners group and Super 8. I hope that this does not happen. This is no way to go about creating improved communications between franchisor and franchisee.

Since no one from the owners group is claiming specific responsibility for the Web site and its outrageous distortions, it is difficult to determine just who is making its many allegations and what his or her personal motives might be. As I comment below on some of the content of their Web site, I will highlight in italics the quotes and allegations that I took directly from their Web pages just a couple of weeks ago. I will not edit the excerpts, so they will be printed exactly as they appeared on their Web site. As always, you can count on my responses to be accurate and factual.

System Quality and Reservation Restriction

I will start with what I consider to be a few of the most telling and preposterous positions taken by this owners group, but I think it speaks volumes about exactly what they stand for and would want us to adopt at Super 8. I am especially concerned about the following statement that they make:

“To put any hotel off the reservation system for failing to meet the quality standards of Super 8, while the hotel is still under contract and paying fees, is a violation of franchisee rights”.

What an absurd point of view this is. First, I would advise the author to read his or her franchise agreement. Reservation restriction is clearly stated as a possible result of ongoing, sustained poor quality. We have every right to do it and we will continue to do it. It is the first step leading to the termination process. Can you imagine anyone thinking that we would condone poor quality and knowingly send reservation customers to dirty, sub-standard, failing properties? Someone who would stay at one of these terrible properties tonight could be your potential guest tomorrow night. We have a responsibility to all our good Super 8 operators not to direct reservations to dirty, substandard, non-compliant properties until they improve their quality to acceptable levels. You have my assurance this policy will not change.

Another distorted opinion of theirs is this:

“taking hotels off the reservation system for non-payment of invoices or failing QA reports is morally and legally wrong and in violation of franchisee rights”.

This statement is equally if not even more absurd. Would your power company keep the electricity on if you refused to pay your bill? Or what about your staff? How long would they continue to keep coming to work if you refused to pay them? How about your cable TV bill or your gas bill? What would happen if you refused to pay those? Do you really want to follow leadership with ideas as absurd as this? In addition, it is very unfair to those of you who are conscientious and pay your Super 8 invoices on time to allow these non-payers to get a ‘free ride’ from our brand advertising and marketing programs at your expense. Again, you have my assurance that this policy will not change. Nor can it change since it is clearly stated in the franchise agreement that one of the possible results of non-payment or uncured QA failures is reservation restriction which is, again, the first step in the franchise termination process.

Customer Satisfaction

As to customer satisfaction, here is their belief:

“The franchisor should not force the hotel to resolve all the complaints to the guest’s satisfaction.”

Can you believe anyone in the hospitality industry would not strive to ensure that
every guest is satisfied? For those of you whom I have gotten to know over the years and
whom I know run excellent properties, it surprises me that you would subscribe to such a position because I know you don’t agree with it. I know you would not want us to run this chain with this kind of attitude toward your guests - your customers. We all know that customers can sometimes be unreasonable and may occasionally try to get something for nothing. But they are always customers, and the vast majority are good people who will come back to visit you and your fellow franchisees again and again if they treated well. Sure, there are always a few that you can’t please but you still have to try! That’s the nature of our business, and something that you must expect. Just how many customers can we leave dissatisfied before it begins to impact the business of all our Super 8 franchisees?

As for customer complaints and our Customer Care department, the owners group has this to say:

“The motels must resolve any guest complaints to the guest’s satisfaction or they will face a fine is totally unacceptable. Not giving hotel owners a chance to present their side in cases that involve questionable complaints should be stopped. Again to fine a hotel $25 - $120 per complaint for just registering the complaints will not hold up in any arbitration or any court. The fees for this department are part of the franchise fees that we pay the franchisor”.

Our guest complaint resolution policy is very generous. Super 8 is one of the only chains that allows you an allotment of guest complaints. Contrary to the inaccurate and misleading statement above, you are always given an opportunity to respond to the complaint and resolve it. In fact, our seven-day response period is longer than most other chains, many of which only give you two or three days to reply to a guest complaint before resolving it themselves and charging you a fee. Finally, you are only assessed a processing fee if you exceed your allotment. If you ignore the complaint or our Customer Care department is forced to resolve it for you, you are charged a resolution fee. These fees are clearly not part of your franchise fees if you read the franchise agreement. Any allegation by this group to the contrary is not true and very misleading. The best way to prevent these fees is to minimize your guest complaints.

Assertions such as “Super 8 owners are losing control of their hotel to franchisor domination” or references to the “corrupt practices that Wyndham Worldwide is involved in” or “Wyndham Worldwide has never considered the interest of hotel owners in any decisions that they make” are someone’s opinion, perhaps, but they are certainly not true.

You control your business, but you also have a responsibility to adhere to the terms of the franchise agreement that you signed. Wyndham is not involved in corrupt practices and I can assure you, as a former franchisee and operator myself, that I always think about your interests when making brand decisions. And most certainly, the Super 8 FAB members think of nothing else when they offer us their advice on brand policy or standards changes to improve our system performance. As I outlined above, the brand is performing exceptionally well, fulfilling one of the primary interests of hotel owners.

Economy vs. Budget Lodging Chain

Let me clarify one point that seems to be confusing for the owners group. Super 8 is an economy lodging chain. That has been our competitive position since the inception
of the brand 34 years ago. It seems that the owners group isn’t sure about this, vacillating between referring to us as an economy chain sometimes and then a budget chain when it better suits the context of their allegations. Smith Travel Research has clear delineations, based on system ADR, of which chains compete in the economy segment. We do not consider Super 8 to be in the same operating category as Motel 6, Budget Host, Rodeway Inns, Red Carpet Inns, Scottish Inns and other budget chains, and I doubt that you do
either. That’s not to say that you don’t have to compete against these chains in your market, it’s just that, based on system-wide ADR, we measure Super 8’s performance against a competitive set of economy chains whose ADR is more consistent with ours.

The owners group makes several inflammatory statements regarding Super 8’s efforts to compete in the economy segment. In particular, the group states,

“While the Super 8 customers are used to paying the budget rates, these extra amenities and services have become a burden on the owners and an oppressing tool for the franchisor”.

There’s that word “budget” again. And extra amenities? To remain competitive, over the past three years we have added shampoo, high speed Internet access, coffee, an alarm clock radio, and a hair dryer to our standards. Nearly all of our economy competitors already offered these things when we upgraded our requirements. We revised our SuperStart® breakfast program in order to give you more freedom to customize it to your market needs. We updated some obsolete towel, linen and mattress standards that were so old they required you to buy products that were no longer available for you to buy. If remaining competitive is ‘oppressing’, I ask you to think about where you’d be if our brand wasn’t competitive.

Here’s a little more background about our recent standards changes. About four years ago I met a former owner of a Super 8 property who was one of the original proponents of forming an owners group that would be independent of the Super 8 brand. I shared many phone calls and e-mails with him over the years and met him at some of our regional meetings and conventions. He operated an exceptionally fine Super 8 property. He was, however, unusually critical about the way we managed the Super 8 brand. In fact, you may be surprised to learn that strongest criticisms involved our brand standards and our lack of in room amenities, in particular the lack of guest bathroom amenities and other guest services that, at that time, were only being offered in the mid-priced segment or higher. At a time when we had not yet even made shampoo a standard at Super 8, he claimed his Super 8 property was offering shampoo, conditioner, mouthwash, lotion, irons, ironing boards and other upgrades and in room amenities that he insisted were needed throughout our system. My response was usually to remind him that we were an economy brand, and that we would do what was necessary to remain competitive in our segment but that we did not intend to add unnecessary amenities and costs to our franchisees. Ultimately, some of these amenities have become the expected norm in the economy segment and, as a result, we have included them in our standards to remain competitive. In fact, I told him that it was he that really got us thinking about taking a new look at our Super 8 amenities as far back as 2004. Though we had many disagreements over what was right for Super 8, I had much respect for this gentlemen’s passion for success, both at his property and for the Super 8 brand. It may surprise you to learn that on more than one occasion I spoke to him about becoming involved in our Super 8 FAB, and he declined my invitations.

TripRewards®

The owners group has leveled a host of allegations against our guest loyalty program, TripRewards. Our in-house data consistently shows that TripRewards members stay more often, stay longer, and pay more than non-members. These truly are your most loyal customers. Our properties that actively support the program by enrolling new members and welcoming existing repeat members stand to benefit far more than those who do not embrace the full value of TripRewards.

The owners group leaders state:

“the TripRewards program was initially introduced to create a loyal customer base for Wyndham group which would also benefit the hotels”. They add, “the program has achieved neither.”

This claim is unsubstantiated and not true. TripRewards was introduced to all Wyndham Hotel Group brands in 2003 in response to increasing consumer demand for a points-based loyalty program, an absolute necessity in today’s competitive world. The number of reservations generated by TripRewards members has increased dramatically every year since then. And much of this business is from guests who have never stayed at either your property or any other Super 8 in the past. In fact, over 34% of Super 8’s TripRewards business is coming from guests whose membership cards bear the logo of another Wyndham brand. Today, TripRewards has become the fastest growing loyalty program in the lodging industry.

The owners group wants you to believe that we enroll TripRewards members into
the program without their knowledge, even when they are standing at your front desk as a
walk-in. This is not true and, frankly, not possible despite what they tell you. What is
true is that if a guest makes an online reservation, he agrees to become a TripRewards
member unless he opts out of membership by un-checking a plainly visible enrollment
box during the reservation confirmation process. If, at a future date, this guest walks into
a property and does not use his TripRewards membership, the system will ultimately
award him points if he paid a qualifying rate. I will discuss this more below.

The owners group also wants you to believe that TripRewards “unfairly disadvantages the hotel owners and generates an extra ROYALTY FEE for Wyndham.”

How can you be disadvantaged by offering a program that is not only expected by today’s travelers, but is also the fastest growing program in the industry? This is preposterous and is designed for one purpose - to confuse and agitate you. I take the position that for you not to have a points-based loyalty program would be a disadvantage. And to categorically state, as they have, that Wyndham is somehow converting the 5% charge associated with TripRewards into additional royalty dollars is a fabrication. The 5% charge is extremely competitive and consistent with most other industry programs, is used for administration, promotion, marketing, award fulfillment, and any other ongoing expenses required to maintain a world-class loyalty program.

As for TripRewards redemptions, the owners group makes the following inaccurate allegation:

“the free night stay practice is another corrupt practice by Wyndham Worldwide, which violates existing laws and rights of property owners”. They go on to tell you that “the franchisor, while forcing to give free nights refuses to fully pay for it. The calculation is 70% of ADR which normally comes to 40% of rack rate”.

To begin with, we are not violating any laws and we are not involved in a corrupt practice. Aside from not making reference to the specific laws and rights they allege Wyndham is violating, the rest of this allegation is also not accurate. We offer one of the most generous free night reimbursement programs in the industry. Those of you with other non-Wyndham brands know this very well. At Super 8, if your occupancy is below 90% on the night you honor the free night stay, we reimburse you 70% of that day’s ADR. And this amount will never be less than $25.00. When you redeem a free night you’ve lost nothing and, in fact, you’ve gained 70% revenue on a room that would have otherwise gone empty. Better yet, if your occupancy for that day is 90% or more, we reimburse you at 110% of that day’s ADR. This is very clearly explained in your TripRewards front desk guide.

Of all the inflammatory misrepresentation of facts about TripRewards that they try to get you to believe, one of most misleading is this:

“Wyndham deducts QA points for not marketing the TripRewards program while rewarding points to those who market it aggressively”.

The first part of this is correct. If you are not in compliance with our standards requiring that you display the TripRewards promotional materials, you will incur ‘compliance’ points on your QA inspection. The second part of this statement is, to be frank, a lie. But they hope you will believe it. In fact they make the claim more than once. So let me be very clear about this:

Super 8 DOES NOT award and NEVER HAS awarded bonus QA points to anyone for anything. Not for aggressively promoting TripRewards, not for good Medallia scores, not for good QA scores, and not for any other reason.

Anyone from this owners group or anywhere else who tries to convince you differently is trying to confuse and mislead you. Do not believe them. Our QA inspectors score your property on three areas of critical importance to our brand consistency: Cleanliness, Condition, and Compliance.

Another confusing and misleading statement they make is this one:

“Super 8 owners give 5% of their revenue to Wyndham’s TripRewards card holders so that they can go and shop at Best Buy with our money.”

This is ignorant of the way rewards programs work. TripRewards members are your customers, not ‘Wyndham’s card holders’. What the owners group doesn’t tell you is that the number one redemption request by Trip Rewards members is free night stays in our properties. Additionally, providing a wide array of ways for members to utilize their points is what extends the breadth of the program and adds to its appeal and success. All of you are card-carrying members of several points programs, and you certainly know how the redemption offers work. Everything from magazine subscriptions to gift certificates to electronics can be obtained by redeeming points. This is what today’s consumers want and expect. Don’t allow this group to try to convince you that this is a sinister practice.

Further, you should not judge the TripRewards program’s success by looking at how many free night stays you have redeemed (although it is true that free night redemptions do bring new revenue to you from the program through the 70% and 110% program I explained above) or how many Home Depot cards your guests have earned. These are consumer benefits, not property benefits. Program success at the property level should be measured in one way - by the amount of revenue program members are bringing to you each and every day. I am happy to be able to tell you that this year your director of business development, or DBD, will have a new analysis tool to share with you that will show you your specific ROI on the TripRewards program at your property.

Regarding your monthly TripRewards bill, like any other top notch program, it will seek out its members automatically to ensure that they receive the points they expect. Remember, it needs to be easy for members to get their points, not difficult. If you belong to a points program I am sure you understand this. So if a member complains that he did not receive points during a stay, or if his membership number is not put into the system during his stay, the system will proactively match the guest name and other information with his membership number and award points. This may happen up to several weeks after the guest has checked out and may not appear on your bill for several billing cycles. It is not an overbilling. If you do find a legitimate billing discrepancy from TripRewards, we will always investigate it for you. And if there is an error we will issue you the credit you deserve. Like any other invoice you receive from any supplier, you should routinely check your TripRewards invoice for accuracy and report discrepancies to your franchise services manager, or FSM.

Quality Assurance

As for our Quality Assurance process, we randomly inspect every property twice a year to ensure that our quality standards are being met. In addition, we provide direct guest feedback, via Medallia, from random e-mail surveys sent to your guests. But this group thinks the QA inspection is designed for a different purpose:

“the QA report is a tool that the franchisor uses to enslave hotel owners…”

This statement is, if not overly dramatic, rather unusual. I doubt that many of you feel enslaved by our QA inspections. In my career I have been both a GM and an owner and I know I never felt enslaved by them. You may not be prepared for the inspection when it happens, you may not like the idea that it is happening, and you may not like the result of the inspection when it is finished, but I do not believe that you agree that the QA inspection enslaves you. What it does do is ensure that, to the best degree possible, all Super 8 properties are constantly being evaluated for the three components of brand consistency that I described previously: Cleanliness, Condition, and Compliance.

Their Web site states,

“While most of the inspectors have demonstrated honesty and integrity in their job, there have been cases where the inspectors have demonstrated bad attitudes and have failed hotels for little fault of the hotels”. Also, “QA needs to be more consistent and a point of contact needs to be established for owners in the event of inconsistencies”. And, “we demand the franchisor come up with a quality assurance policy which reflects the brand principle which gives utter most importance to cleanliness”.

I am in full agreement that we need to continue to strive for greater consistency
among our group of QA consultants. We work very hard to train them all to see things the same way but of course it is not a perfect system since, after all, we are dealing with human beings. It is refreshing to hear that they are generally perceived to be honest and have great integrity. As for any demonstration of a bad attitude or, as one anonymous franchisee alleges, racial prejudice, you have my assurances that I will personally look into any such allegations brought to my attention. Such behavior will not be tolerated. As for a point of contact, your first contact should always be your FSM.

Regarding the demand for more QA focus on cleanliness, I agree completely and appreciate the suggestion and recognize it as a valid request. In fact, effective February 1, 2008, we will reduce the passing housekeeping score for every Super 8 property from 50 points to 40 points. This reduction will help us assure that our properties remain cleaner than ever and should renew the focus on the “Cleanliness” part of the QA process as requested.

This group has a distorted view of how we should manage system-wide quality:

“inspection report where three consecutive failures could result in dismissal and litigation is a form of corruption that Wyndham Worldwide is involved in. Liquidated damages tied in with QA failure have helped generate Wyndham extensive additional revenue. It has become a revenue source that they have relied on to increase their revenue”.

How does the author know anything about “extensive additional revenue” to Wyndham?

Obviously, this allegation is all fabricated. And to all you good franchisees who work hard to keep your properties in good condition, do you really want to see properties with 3, 4, 5, or 6 consecutive QA failures remain in our system? I know you don’t, because you ask me about it all the time. But it would appear that this group is going on record as standing for the tolerance of substandard, non-compliant, dirty, inconsistent properties in the Super 8 system. You need to think about that before you risk your reputation by supporting such a group with your hard earned dollars. For those of you who know better than to become part of any organization with such low quality standards and expectations, you have my assurance that I will continue to pursue all legal avenues to remove failing or substandard or non-compliant properties from our chain. Statements such as the one above should make you realize that this group wants to prevent us from removing failing properties from our system. This will not happen.

Additional Issues

1. Here is their view about one of the most important sources of business for our Super 8 operators, the GDS:

“the GDS reservations are a tragedy for the hotel” and “Super 8 owners are not required to participate in Super 8’s GDS program”.

Do not be misled by these statements. The facts are that in some very old franchise
agreements, for obvious reasons, there is no mention of the GDS. Consequently, this small number of franchisees are not required to participate in GDS programs, although it is interesting to note that most of them do elect to ‘opt in’ at their own request. They realize that to just shut out the third party providers such as Orbitz, Expedia, Travelocity, and others doesn’t make good business sense in today’s environment. In all other Super 8 franchise agreements GDS participation through Super 8 is mandatory, just as it is with almost all other franchisors. Unlike other franchisors, however, at Super 8 we give you the added flexibility to control your GDS participation to suit your business needs. Most other brands don’t do this. With them, you either participate by their GDS rules or you won’t be part of their chain.

2. Another misleading allegation the owners group makes is the following:

“Increasing franchise fees during license transfers has become a standard practice for Wyndham”.

Here are the facts: Except in rare cases, or in the few states where it is required by law, we DO NOT transfer license agreements at Super 8. Whenever a property is sold it requires a NEW franchise agreement, which, of course, is subject to existing franchise fees in effect on the date the new agreement is signed. At that time, we also provide the buyer with a property improvement plan and a punchlist of items that need to be improved within specified timeframes in order for the property to continue in the system as a compliant Super 8. Not to do this would be grossly unfair to the rest of you in the Super 8 system. This is disclosed to the buyer before he buys the property, so the decision as to whether or not the buyer wants to take financial responsibility for the punchlist and the new franchise fees is up to him. Contrary to their statement above, in those few instances where a franchise transfer is allowed or required by law we never increase the franchise fee. A transferred agreement carries with it all the terms and liabilities that were agreed to by the original parties.

3. The owners group is also advising you to refuse to accept our Wyndham approved property management system by stating this:

“reject the implementation of Softhotel”.

I urge you not to listen to this advice, since you are being directed to violate the terms of your franchise agreement. Several Super 8 properties participated in the preliminary testing of Softhotel for several months to help us work the kinks out of the system, and as a new product, it is regularly upgraded. If you have HSS or MSI and paid for a hardware refresh in the last year or so, you will not be converting to the Softhotel product at this time. Don’t allow this group to have you believing that your hardware refresh expenditure was a waste. Currently, Softhotel is only being installed in properties with no Wyndham supported PMS as required by the franchise agreement. During your next required refresh period, everyone will migrate to Softhotel or whatever approved PMS is appropriate for the size of the property.

When comparing the overall cost of Softhotel to the similar Choice Hotels system, Choice Advantage, which carries a lower initial cost and, contrary to what the owners group wants you to believe, higher monthly maintenance fees, our Softhotel system will begin to cost you less overall just 13 months after installation and will cost you less every month thereafter. Again, owners group leaders just don’t have all the facts or choose not to share them with you.

As for Direcway charges, the owners group leaders have a short memory. At the
outset of the Direcway agreement Super 8 subsidized the cost to franchisees if they signed up for the service immediately. Those franchisees that took advantage of this offer received their Direcway for $84 per month for the first two years, then the regular $150 per month charge for the duration of the contract. Everyone else paid $150 per month at Super 8 and at all Wyndham brands. At Wyndham there are no rates of $100 and $160 per month as stated on the owners group Web site. Again, their information and its source are inaccurate and not credible.

Franchisee Advisory Board

Finally, a word about the Super 8 Franchisee Advisory Board. This group of franchisees meets with management four times a year and offers guidance and advice on a wide range of topics affecting our brand. Every major standard or amenity change is brought before the FAB for review before it is implemented. They challenged us to spend more money on advertising, to remove more substandard properties from the system, to give more freedom of choice in the SuperStart breakfast program, to find ways to provide you with better pricing on products, services, and your required amenities, and to provide ongoing communication with the franchise community. They have assisted us in the development of our new guest room program, and they are involved in the development of a new logo for our chain. In fact, they were very supportive of our plan to offer financial assistance in 2008 to all franchisees in good standing to assist with the changing of their signs. The FAB members are there to answer your questions and be your advocates. You should reach out to them with comments, questions and suggestions on ways to make our brand better for everyone.

As you know, the names and contact information for all FAB members, as well as all of us on the brand team, is posted on MyPortal, along with the FAB Guiding Principles and the FAB membership application. We also post a summary of each FAB meeting on MyPortal to keep all franchisees informed about the meetings, and three or four weeks prior to every meeting we provide you with a form to submit topics and questions for us to discuss at the meeting.

While on the subject of the Super 8 Franchisee Advisory Board, you should also know that one of the current members of the FAB called me several few weeks ago to tell me that he had reached out to one of the organizers of the owners group, Mr. Jay Patel. He called Jay Patel in response to calls and questions he was receiving from concerned Super 8 franchisees who were being solicited to join this group. After having what he told me was a very cordial conversation with Jay, this board member told him that he would speak to me about the possibility of Jay attending our December FAB meeting to meet with and speak to the Super 8 FAB members and the brand team in the spirit of ongoing dialogue. I agreed that it was a good idea and I later sent Jay an e-mail message inviting him to call me to discuss this.

Unfortunately, Jay Patel declined my invitation to attend our FAB meeting in December, which was very disappointing.

Conclusion

We all have a lot to be proud of these past few years. And from the results you have been generating recently, I have every reason to expect that our brand performance and success will continue in 2008 and beyond. I encourage you to focus on your business and to continue to do the things you are doing that are making a difference for Super 8.

In every franchise organization, as in any group, there will always be a few unsatisfied individuals. Don’t allow yourself to dedicate your time, energy, or financial support to their distractions. And, don’t allow yourself to be influenced by someone else’s agenda. They are doing you as well as the Super 8 brand a great disservice by disseminating inaccurate information this way. I will pursue every means possible to prevent the damage they may cause to our brand and ensure that accurate information is provided to you.

As always, I encourage you to continue to reach out to me or any other member of
the brand team, the members of the Super 8 Franchisee Advisory Board, your DBD or your FSM whenever you have a question or a suggestion that will make Super 8 better for everyone.

I wish all of you a very happy new year filled with much success!