Is hotel franchising important? Since almost 75% of all U.S. hotels are franchised, perhaps you would agree with me that franchising is of major importance in the hotel world.
What should a franchisee expect from a hotel franchisor? Franchising is recognized as an excellent vehicle for capital formation and rapid business expansion. Business franchising is essentially a mechanism of product or service distribution. Typically, any service business must build a system of distribution to develop a market for its services. Building an internal distribution system of company-owned hotels requires enormous capital, substantial risk and many years. Through franchising, the owner of a hotel brand (the franchisor) grants rights to others (the franchisees), to engage in the business of distributing the franchisor’s hotel brand using the franchisor’s trademarks, trade names, and marketing system. In theory, the franchisee acquires the right to own a business representing a proven service brand, a respected trademark and an established operating system that has been fully “de-bugged? to achieve maximum profit. The franchisor, on the other hand, is able to build a distribution system of branded hotels without the investment of substantial capital and without financial risk.
Read More
No comments yet.