Choice’s Settlement with AAHOA: Things Are Seldom What They Seem, Skim Milk Masquerades As Cream
The Asian American Hotel Owners Association's January 27, 2012 letter of appreciation to Choice Hotel’s President & CEO Steve Joyce is less than it appears. Apparently, Joyce has agreed to the following:
“New applicants covered under Choice’s Impact Policy will have the option to select an exclusive territory or follow the current Impact Policy.”
Skim Milk: The option to select an exclusive territory applies only to new applicants not to Choice’s 6100 existing franchisees.
“The revised Impact Policy which incorporates AAHOA’s recommendations along with further changes suggested by CHOC (Choice Hotel Owners Council). These changes have been vetted and accepted through the CHOC Fair Franchising Committee and will become effective on January 1, 2012.”
Skim Milk: CHOC is an entity which is completely controlled and funded by Choice Hotels International. Its name (Choice Hotel Owners Council) is an oxymoron.
"The 80% RevPAR requirements in the Impact Policy has been eliminated effective immediately.”
2% Milk The elimination of the 80% RevPAR requirement appears to be a genuine benefit except for the inherent unfairness of impact studies.
“Choice will welcome additional impact consultants who are recommended by franchisees provided that these consultants meet the current requirements and have completed the training and vetting process.”
Skim Milk: If the training and vetting process of new impact consultants needs Choice’s approval, the impact process will continue to be strongly one-sided in Choice’s favor.
“Choice’s current Fair Franchising Policy (in which the Impact Policy is housed) contains the “good faith and fair dealings”….language”.
Skim Milk: In practice, Choice’s policy is ‘poor faith and unfair dealings’
“Choice intends to commission a research study for the benefit of franchise owners that will address CHOC’s mission, the voluntary versus mandatory nature of the organization, and guidance concerning questions about whether the organization should be fully independent. Choice will keep AAHOA informed as to the results of this research.”
Skim Milk: Letting Choice commission (and monitor) such a study about CHOC almost guarantees the outcome. There will be no fully independent CHOC organization. If Choice franchisees want a fully independent CHOC, there must be complete separation of CHOC from Choice with separate office location, funding solely from the franchisees, and independent Chief Executive selected by CHOC members only.
Conclusion: AAHOA capitulated too easily and let Choice off the hook