Fair Franchising Is Not An Oxymoron – Part 2

Hotel Interactive, Inc.:

In 1998, the Asian American Hotel Owners Association identified a set of standards called the 12 Points of Fair Franchising by which to judge the actions of franchise companies. Now, 9 years later, AAHOA has updated the 12 points and has embarked on a survey of franchisors to assess their compliance with these fair franchising standards. In each of my next Hotel Interactive articles, I will highlight the 12 points.

Point 2: Impact/ Encroachment/ Cross Brand Protection:
Franchisors should establish a fair and reasonable formula to protect a franchisee’s assets, and the formula should be included as a contractual provision in their franchise agreements. The formula should include the following important terms:

A. Franchisors should grant each franchisee contractual rights to a protected area or geographic ‘area of protection’ (AOP) in which the franchisor will not allow another facility with the same or similar brand name as the franchisee’s hotel to operate. For example, if the franchisee owns an ABC Hotel, the franchisor will not allow another facility with the same name (i.e., ABC Hotel) or a similar name (i.e., ABC Hotel & Suites) to operate in the protected area or geographic AOP.

Continue reading Fair Franchising Is Not An Oxymoron – Part 2.

Also read: Fair Franchising Is Not An Oxymoron – Part 1.