With an eye on growing its overall presence in the Southeast while adding an economy brand to its growing portfolio of midscale hotels, Cobblestone Hotels, LLC recently acquired Key West Inns, Hotels & Resorts and Centerstone Hotels.
The Neenah, WI-based company acquired the two brands, which were part of Vimana Franchise Systems, LLC, earlier this month. Cobblestone Hotels’ five brands now include Cobblestone Hotels & Suites; Cobblestone Inn & Suites; Boarders Inn & Suites by Cobblestone Hotels; Key West Inns, Hotels & Resorts; and Centerstone Inns, Hotels & Plaza Hotels. The addition of the 28 properties from Vimana bring Cobblestone’s portfolio to 117 locations.
Brian Wogernese, President, CEO and Founder of Cobblestone Hotels, noted of the acquisition “there were just a lot of things that lined up.”
Wogernese added that things lined up from a financial perspective as well. While he couldn’t comment on what the company paid for the brands, he did note, “we had the cash and we didn’t have to finance anything. They were looking to get out and it was just good timing for us.”
The deal was initiated by Steve Belmonte, CEO of Vimana Franchise Systems, who felt that Cobblestone represented a good fit for the brands. “As we look for growth going forward, Cobblestone is equipped with a much more robust infrastructure and much stronger support staffing for their franchisees. I think this is a real home run for the Centerstone and Key West franchisees because they’ll be owned by a company that has better resources,” he stated.
The Key West brand was founded in 1989 by Cory Jackson, Sr. The development of the brand included a plan to create, own and manage a new Southern Florida themed hotel brand focusing on smaller markets. Centerstone, meanwhile, was created to in 2011 by Belmonte to allow franchisees the opportunity to have a non-themed hotel.
Wogernese pointed out some of the similarities between Key West, in particular, and Cobblestone, which is celebrating its 10-year anniversary this year.
“The brand was started almost the same way that Cobblestone was started. It was put together in small town markets with this Key West vibe and feel,” he said.
The CEO maintained that the idea of getting into the “upper-economy space” with Key West was appealing for the company, particularly since its Cobblestone brand is positioned in the upper-midscale market.
Belmonte also acknowledged some similarities between the companies as well. “They share that same franchise-friendly philosophy that I grew the brands on, so I’m happy about it [the deal],” he said.
Wogernese elaborated on the geographical advantages of adding the two brands— which have their largest concentrations in Alabama, Florida and Georgia—to the company’s lineup, which has traditionally had more of a Midwest focus. “Fortunately we haven’t been very strong in that part of the country so that was also a good spot for us,” he said.
According to Wogernese, the company has aggressive growth plans for the Key West brand and has communicated that in various site visits. Wogernese added it has filed a FDD (franchise disclosure document) and is “out actively selling.”
He added, “It’s been pretty stagnant for a while. That’s why we wanted to get out and touch and feel all the franchisees and say ‘we’re here, we’re going to put some effort into growing this thing,’” he said.
Wogernese elaborated on some of the company’s efforts to get feedback from franchisees. “We wanted to sit down with everybody and talk with them to find out what do they like; what do they not like; and what do they want to see going forward,” he said.
The company has also been discussing the future of the Centerstone brand, which it plans to maintain and eventually grow as well. “We’re just trying to define exactly what the direction on growing that is going to be,” said Wogernese.
Prior to the deal, Cobblestone had some 88 locations open with 8 under construction. Wogernese had previously set forth a goal of reaching 100 properties by the end of 2018. While the company has now easily surpassed it, he noted “we would have been right there” even without the acquisition.
Wogernese also pointed out the company is open to future acquisition opportunities as well. In addition, he acknowledged the company is taking on more of a pure franchise development focus and is hoping to take its growth of 12-15 hotels a year to 20-30 properties.
In support of that effort, Cobblestone has added hospitality veteran Patrick Mullinix as president of franchise development primarily to grow the Boarders and Key West brands and increase their presence in the south. Wogernese added there will be more franchise development personnel added going forward as well.
Prior to joining Cobblestone Hotels, Mullinix was with Vantage Hospitality Group over 14 years, serving as Group President of Vantage Hospitality Group’s Value Brands. He oversaw all national expansion efforts and domestic development for the Americas Best Value Inn and Country Hearth Inn & Suites brands. He later launched Signature inns, a boutique hotel brand.
Belmonte, meanwhile, has retired from Vimana but added he hopes to remain active within hospitality potentially serving on an industry related company’s board of directors.