Creating Brands to Sell Franchises
Recently Peter Yesawich, Chairman and CEO of Y partnership answered, “The concept of “need” can be subjective. Yes, evolving market demands often require new products to satisfy them, but let’s not confuse market influence with the pressure to drive profit to the bottom line.”
"Brands are created in this business principally as a means to sell franchises,” Yesawich said. “They’re not necessarily created to reflect market conditions. You will see that primary motivation for their introduction is to carve up the space in a more finite manner to hopefully sell franchises. That’s the bottom line answer."
As Stefani C. O’Connor, Executive News Editor, Hotel Business Green Book (2011 Almanac & Market Guide) writes:
If you bring a literal interpretation to lodging’s field of brands, the look of the landscape heading into 2011 is more a hodge podge of entities that have sprouted up rather than a totally cultivated, well-laid out assemblage of choices for potential licensees to stroll among and pluck at will for their portfolios…
In many fields, a 'more-the-merrier' approach is welcome; in lodging, not so much. More brands means more competition, greater dilution of the discretionary dollars travelers could spend and, in some cases, more confusion for consumers who are being overwhelmed with options, a situation that also exists for potential developers and licensees.
About the author: Stanley Turkel, MHS, ISHC operates his hotel consulting office as a sole practitioner specializing in franchising issues, asset management and litigation support services. Turkel’s clients are hotel owners and franchisees, investors and lending institutions. Turkel serves on the Board of Advisors and lectures at the NYU Tisch Center for Hospitality, Tourism and Sports Management. My new book is available at reduced rates. Vist GreatAmericaHoteliers.com.