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David Pepper, chief development officer, Choice Hotels International
Prakash Maggan is the CFO of Lexington, Ky.-based Rainmaker Hospitality, which owns and operates select-service hotels, mostly in Kentucky. Maggan is in a unique position to opine on the modern-day status of
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the franchisor / franchisee relationship: He is the current chair of the global board of directors of the IHG Owners Association, an independent organization representing more than 5,000 IHG hotel owners and operators. It acts as a collective voice to, among other things, advocate for member interests.
Maggan grew up in the hotel business. Putting aside any dissatisfaction in the franchise relationship, Maggan said the sheer size of the actual agreement gives him pause.“ The physical size has expanded,” he said. Hotel franchise agreements have generally become longer, more
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complex and more prescriptive over the past few decades.“ Most owners really don’ t understand what’ s in it and what they are really paying for,” Maggan said.
Which is all to say that the franchise agreement skews in favor of the franchisor. No one understands this better than Steve Rushmore, who, as founder of HVS, is an expert on the franchise agreement. Consider franchise terms:“ The franchisor will make owners believe that the agreement is non-negotiable,” Rushmore said. In a clever attempt to make it seem like the franchise agreement is an intransigent document, many hotel
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Steve Rushmore founded HVS in 1980. He now provides online courses for hotel professionals.
companies, Rushmore said, will send the agreement in PDF format.
Rushmore counsels franchisees to pick and choose where to negotiate. It’ s not simple: There are hundreds of clauses or provisions in a typical
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The 115-room Everhome Suites Georgetown – Austin provides apartment style suites. |
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September 2026 hotelsmag. com 9 |