Is Hotel Franchising Important?
Two thoughts have recently come to mind in regards to hotel franchising. The first is a legal development out of California that franchisors should take note.
The California Court of Appeals has once again declined to enforce several one-sided franchise agreement clauses. The agreement in dispute had out-of-state choice of law and arbitration venues specifying Texas, the home state of the franchisor while the franchise was located in California. The California Court of Appeals also found that arbitration clauses may also be challenged under the California Franchise Investment law passed in the early 1970s.
Is Hotel Franchising Important?
The second thought I have is a simple one. If you think that franchising in the hotel industry isn't important, just look at these numbers from Hotels in August 2008:
Companies That Franchise The Most Hotels (as of Jan. 1, 2008)
|
Company |
Hotels Franchised |
Total Hotels |
| Wyndham Hotel Group | 6,544 | 6,544 |
| Choice Hotels International | 5,570 | 5,570 |
| InterContinental Hotels Group | 3,392 | 3,949 |
| Hilton Hotels Corp. | 2,463 | 3,000 |
| Marriott International | 1,922 | 2,999 |
| Accor | 1,089 | 3,871 |
| Carlson Hotels Worldwide | 929 | 969 |
| Vantage Hospitality Group | 798 | 798 |
| Hyatt Hotels & Resorts | 417 | 721 |
| Starwood Hotels & Resorts | 408 | 897 |
Stanley Turkel, MHS, ISHC, is a New York-based hotel consultant specializing in hotel franchising issues, asset management and litigation support services. He is also available for due diligence studies for an acquisition, a third-party audit of a marketing or operational problem, an expert review of a management contract or a franchise agreement, or litigation support. Mr. Turkel is a member of the International Society of Hospitality Consultants and can be reached at 917-628-8549 or email at stanturkel@aol.com
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Related reading:
Stanley Turkel is a Virginia-based hotel consultant specializing in hotel-related expert witness cases and asset management. He was designated as the 2014 and 2015 Historian of the Year by Historic Hotels of America, the official program of the National Trust for Historic Preservation. To order his books go to www.stanleyturkel.com and click on “books”:
-“Great American Hoteliers: Pioneers of the Hotel Industry”
-“Built To Last: 100+ Year-Old Hotels in New York”
-“Built To Last: 100+ Year-Old Hotels East of the Mississippi”
-“Hotel Mavens: Lucius M. Boomer, George C. Boldt, Oscar of the Waldorf”
-“Great American Hoteliers Volume 2: Pioneers of the Hotel Industry”
-“Built To Last: 100+ Year Old Hotels West of the Mississippi”
-“Hotel Mavens Volume 2: Henry Morrison Flagler, Henry Bradley Plant, Carl Graham Fisher"
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Re: Is Hotel Franchising Important?
Look at the top two brands - Wyndham and Choice. They have just about as many franchised units as all other 8 brands on the list.
Even if these were small sandwich shops, the chain size is huge. But these aren't sandwich shops. They are large investments.