Franchise Agreement In Hotel
A franchise agreement is a contract that generally consists of terms and conditions that determine how a business (franchisor) agrees to make available to another party (franchisee) the company`s brand, services, operating methods and other media in order to carry out a similar transaction for a first payment as well as a percentage of the income generated in the form of a monthly recurring royalty (royalty). Here is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, who unsubscribes. We have completed hotel transactions worth more than $60 billion and developed innovative solutions that help investors successfully deliver hotel acquisitions and help investors and lenders derive value from problematic hotel transactions. Who is your lawyer? Negotiating a hotel management or franchise agreement is one of the most important things hotel owners will ever do for their hotel investment. We can help. Whether you`re planning to develop a hotel or buy a hotel to maximize your revenue per available room (and get capital investors and financing), you`ll likely turn to one of the big hotel brands to “label” your hotel with an appropriate hotel brand. The document forming your rights and obligations is called a hotel “license agreement” or a “franchise agreement”. For many homeowners, their understanding of this important agreement does not go beyond the basic economic conditions of royalties, “protected areas”, duration and possibly “key money”. This article will demystify this critical document by describing in a general way: (1) what franchise agreements are; (2) summary of some of the most essential conditions in the context of hotel franchise agreements; and (3) proposals on the terms that can be negotiated with the franchisee/hotel brand. Over the years, lawyers from JMBM®`s Global Hospitality Group have negotiated hundreds of franchise agreements. We help owners identify their goals, verify and prioritize their needs, and identify the brands most likely to meet those needs. We recognize the restrictions inherent in franchise agreements and advise not only the potential terms, but also the likely terms and how owners can reconcile their needs with the limitations of the brands.
We are a known size for franchisors and bring additional credibility to the deal. The two models described above offer a range of options with examples of advantages and constraints that make them more or less attractive depending on the requirements, priorities and profile of the hotel owner. In addition, the table below illustrates the comparisons between the franchise and management agreement with respect to revenue, services provided by the hotel brand, contract duration, staff, financial commitment and other costs. These hotels belong to many different types of owners, wealthy individuals, corporations or even institutions that all want to maximize business from their property. They therefore turn to hotel groups to provide services and support their activities. . . .