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In the past five months, I have reported, on the Hotel Interactive website, on the relative compliance of five major franchise companies with the updated Asian American Hotel Owners Association (AAHOA) 12 Points of Fair Franchising. The companies reviewed were Accor, Carlson, Choice, LaQuinta and Wyndham.
My reports were based on the Performance Appraisal Reports (PAR) prepared by AAHOA and issued on March 27, 2008.
PLEASE TAKE NOTE: With the following numerical ratings (which were created by me and not AAHOA), I have tried to quantify the relative compliance of each franchise company with the 12 points. In order for a franchise company to rate perfectly on all 12 points, and to receive 100%, it would have to score 8.3 points on each of the 12 points. I have utilized the following numerical evaluations:
| | Points | | Full Compliance | 8.3 | | Partial Compliance | 5.0 | | Minimal Compliance | 3.0 | | No Compliance | 0 |
| | Accor | Carlson | Choice | LaQuinta | Wyndham | 1(a) Early Termination
& Liquidated Damages | 0 | 0 | 3 | 0 | 5 | | (b) Windows Provision | 3 | 0 | 3 | 5 | 5 | | c) Underperforming Propertiese | 5 | 0 | 0 | 5 | 3 | 2. Impact/Encroachment/
Cross Brand Protection
| 5 | 5 | 0 | 3 | 5 | 3. Minimum Performance
& Quality Guarantees | 0 | 0 | 0 | 0 | 3 | 4. Quality Assurance
Inspections/ Guest Surveys | 5 | 5 | 5 | 5 | 5 | | 5. Vendor Exclusivity | 8.3 | 3 | 8.3 | 8.3 | 8.3 | | 6. Disclosure and Accountability | 3 | 3 | 8.3 | 5 | 0 | 7. Maintaining Relationships with
Franchisees | 5 | 0 | 8.3 | 5 | 3 | | 8. Dispute Resolution | 5 | 5 | 0 | 0 | 3 | | 9. Venue and Choice of Law Clauses | 5 | 0 | 0 | 5 | 5 | | 10. Franchise Sales Ethics and Practices | 8.3 | 5 | 0 | 3 | 5 | | 11. Transferability | 5 | 8.3 | 5 | 3 | 0 | 12. Sale of the Franchise System
Hotel Brand(s) | 0 | 0 | 0 | 0 | 0 | | | Total | 57.6 | 34.3 | 40.9 | 47.3 | 50.3 |
According to my rating system, the five franchise companies scored in the following order:
| | Points | | Accor | 57.6% | | Wyndham | 50.3% | | La Quinta | 47.3% | | Choice | 40.9% | | Carlson | 34.3% |
Turkel Conclusion: All of these five franchise companies have a long way to go to reach a satisfactory score on the fair franchising scale. (To repeat: These numerical ratings are mine alone.)
As I have reported elsewhere, this situation could be quickly improved if hotel owners would sign franchise agreements only with those franchise companies who were in full compliance with AAHOAs 12 Points of Fair Franchising. I will report on those hotel franchise companies next month.Stanley Turkel, MHS, ISHC operates his hotel consulting office as a sole practitioner specializing in franchising issues, asset management and litigation support services. Stanley’s clients are hotel owners and franchisees, investors and lending institutions. He serves on the Board of Advisors and lectures at the NYU Tisch Center for Hospitality, Tourism and Sports Management. He is a member of the prestigious International Society of Hospitality Consultants. His provocative articles on various hotels subjects have been published in the Cornell Quarterly, Lodging Hospitality, AAHOA Lodging Business and on the Hotel Interactive and Hotel-Online websites.Don’t hesitate to call:
- If you need help in negotiating your franchise agreement
- If you have a problem with encroachment and impact
- If you need an expert witness in a hotel litigation law suit
- If you need a featured speaker at your company or organization.
Stanley has spoken and written recently on the following subjects:
-Fair Franchising is Not an Oxymoron
-Keeping Score: Which Franchises Comply Worst and Best with AAHOAs 12 Points?
-Franchise Advisory Councils: Powerhouses or Powderpuffs?
-Great American Hoteliers: Pioneers of the Hotel Industry
Call Stanley at 917-628-8549 or email at stanturkel@aol.com.
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Credit
Stanley Turkel
Hotel Interactive, Inc.
Bio: 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. He is a member of the prestigious International Society of Hospitality Consultants. His ...
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