on hotel brands . A careful perusal of the franchise disclosure agreement , noting any litigation , especially involving franchisees , is paramount , Smith said . Hoteliers also should note whether a hotel brand owns any of its hotels outright or in joint ventures since a company investing in its own brand shows a belief in and a commitment to the product , she said .
Hoteliers should examine whether a hotel brand is growing from within , with existing franchisees opening up more hotels , Trivedi said . He said more than half of La Quinta ’ s franchise agreements are with existing franchisees , which shows that those hoteliers are enjoying success .
And just like you would with any job applicant , check refer-ences . Trivedi said La Quinta provides prospective franchisees with a directory of its hoteliers and encourages them to call existing franchisees and ask about their experience with La Quinta . The company has a clause in its franchise agree-ment that allows the hotelier to get out of the agreement if the brand or property is performing especially poorly , which gives La Quinta skin in the game .
“ I believe that your franchisee tells a better story about you than any franchisor can tell about itself ,” he said . “ The best way to win one ’ s attention is to get recommendations from a peer , another franchisee telling him that he ’ s making the right deci-sion . There is no better way to promote a franchise program than word of mouth . Franchisors are going to be successful if franchisees go tell other franchisees that they ’ re happy .”
Smith said that since Hyatt began franchising in 2005 , the business model has remained fairly consistent , with a boiler-plate franchise agreement serving as a baseline . However , each deal is judged on its own merit , so the company will do straight franchising agreements , joint ventures and will manage hotels for groups that don ’ t have management infrastructure .
The more hotels a hotelier owns , the greater his bargaining power when negotiating or renegotiating a franchise agree-ment , and if the hotel is in an especially choice location , franchisees may be able to negotiate reduced royalty fees or even capital investment from the hotel brand , Smith said .
“ Whatever the developer is in need of from Hyatt , we try to bridge that gap ,” Smith said . “ We ’ re very nimble in how we get deals done . It really runs the gamut
6 | TIBO Magazine - Winter 2017 depending on what the particular deal might merit .” “ The franchise model is now more of an actively negotiated instrument , with large ownership groups and advocacy groups asking for certain concessions on key items ,” Joslove said . “ There are more choices among brand franchises , and brands need to court franchisees to acquire and retain the franchise business they seek .”
A HELPING HAND
For franchisors looking to set themselves apart from the rest , having support systems in place to help hoteliers is key . Trivedi said that within 90 days of a new hotel opening , La Quinta ’ s sales team performs a marketing blitz lasting 10 business days to help the new hotel ramp up and establish business relation-ships within the community . The company also promotes its new hotels to loyal customers through promotions and bonus points in its customer-loyalty program .
La Quinta encourages new franchisees to spend several weeks at one of its hotels to learn every aspect of managing the hotel , from housekeeping to frontoffice management and promotions . From the start of a franchise agreement through its termination , Hyatt and La Quinta franchisees have a sup-port staff they can call for help in addressing problems .
Trivedi said franchised hotels have a leg up over independent hotels because brands provide franchisee training , customer-loyalty programs , booking channels , a higher nego-tiated rate with third-party travel websites , market research , marketing and operations expertise , and lower costs negoti-ated with vendors for products and services .
“ There are so many benefits that the brand offers to the franchise partner that it gives them a tremendous opportu-nity to be successful ,” he said . “ An independent hotel would not be able to sustain the costs of these things on its own . Franchisors have become more focused on making sure that their franchisees are utilizing brand resources that can help them succeed . I have seen a franchisee go from one hotel to 20 , 30 or 40 hotels , and they certainly attribute their success to what franchisors have offered him .”
One aspect of La Quinta ’ s franchise model that Trivedi said is especially appealing to franchisees is its brand council , or advisory board , which has 10 franchiseeelected hoteliers along with a comparable number of company executives and operations experts . The
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