Mr. Belmonte

Franchising

Do You Appreciate Your Franchise and are YOU Being Appreciated?

By Steven Belmonte, CEO, Vimana Franchise Systems LLC

2011 seems to be a year filled with appreciation - and rightly so. Coming out of one of the worst economic depressions in decades, people are beginning to really value those who helped them stay afloat during tough times.

This year you can search and find the customary "Military Appreciation Day," "Customer Appreciation Day," and "Secretary Appreciation Day" type events plus some that are more unconventional, such as "Collector Car Appreciation Day," "Hero Appreciation Day," and "Super Secret Comic Book Appreciation Day." This got me to thinking, but what about "Franchise Appreciation Day?"

For nine years the International Franchise Assn. (IFA) hosted such an event that brought together franchise executives across multiple markets to meet on Capitol Hill and discuss how franchisors and their franchisees are being impacted by Congressional decisions. While it proved to be an important event for many years and got Congress to acknowledge their appreciation of the franchising sector, it may not have done much to bolster the "appreciation" felt between the franchisors and franchisees themselves.

Used as a verb, "appreciate" means to recognize the full worth of something, to be grateful for something, to raise in value, esteem, or price.

Using that definition as a basis of discussion, would a "Franchise Appreciation Day" be lucrative today? Do franchisors truly "appreciate" their franchisees and vice versa?

As Chairman and CEO of the industry's leading franchise negotiations company that provides new franchise agreement negotiations and franchise termination/liquidated damage claim negotiations services, I would answer: "No. Absolutely not." Almost daily, I am called upon to help hotel owners resolve disputes that arise between themselves and the franchisor as a way to avoid litigation. While there are always two sides to every story in franchising, right or wrong the odds typically favor the franchise company.

Franchising represents about 60 percent of the hospitality industry, contributing billions of dollars in annual U.S. revenues. So why is it that we as an industry do not celebrate a national or global “Hotel Franchise Appreciation Day?”

Could the answer be that hotel franchising simply isn’t appreciated? With franchise fees what they are today, I have to believe that the franchisors appreciate it. Travelers certainly appreciate it – especially those reaping the rewards offered by growing brand/franchise-loyalty programs. Even national franchisee associations appreciate hotel franchising.

However, when asked to answer the franchise appreciation question while serving as Owner and CEO of hospitality's newest franchise-friendly hotel brand, I would have to say "Yes. Absolutely franchisors and franchisees truly appreciate each other -- at least those who operate with integrity."

Centered on Integrity

Each persons' or brands' character is defined by its integrity – “The quality or state of being complete, unbroken condition, unimpaired, of sound moral principle, uprightness, honesty and sincerity.” (Defined by Webster).

Therefore, if your character– which defines who you are – is broken into two or more entities, you no longer have integrity because you are no longer “whole.” Without integrity, you don’t have much character. Unfortunately, without integrity it is still possible to run a successful business. However, the chance of your being successful is greatly minimized, and while certain people may do business with you, it’s most likely out of necessity.

When your integrity is low, people know it. How many times have you heard a franchisor or franchisee claim to operate with integrity? In the hospitality environment, integrity is achieved by walking the talk and doing for your franchisees, employees or guests what you say you are going to do.

Sounds pretty simple and a good formula for a successful partnership, right? Partnership is achieved by accomplishing goals together and by teaming for the good of all parties. Unfortunately, just as in personal relationships, business partnerships sometimes fail because one of the parties takes his or her eyes off the original goal, or somewhere down the road loses integrity because of a flaw in his or her character (dishonesty perhaps, impaired judgment or in many cases the person just doesn’t care.)

Here's some words for thought: Don't join a franchise that has a history of being litigation happy if you don't have the desire to someday be sued.

When I first met my new business partners Neal and Cory Jackson, I was immediately impressed with their number of years in the hospitality business and the level of integrity they each bring to the table. Even more impressive, however, is the fact that in all their years of running a hotel franchise, they had never been sued by a franchisee or had the need to sue a franchisee. Let me say that again. In over 23 years of running a hotel franchise, there are franchise teams that exist who have never been sued by a franchisee or had the need to sue a franchisee.

That's a pretty powerful testimonial. Not only am I confident in working with these gentlemen who have an impressive track record, but I absolutely "appreciate" their integrity and the way they run a franchise. It's a new standard of hotel franchising that I believe more franchisors need to adhere to.

Developing a new hotel brand amidst this economy is not without challenges, but I believe that franchisees "appreciate" doing business with a team who truly has their best interests in mind, such as receiving an affordable fee structure to ease their monthly expense burden. In addition, offering revenue-generating programs, working closely with franchisees on Internet marketing, and assuring that each hotel is front and center on the Internet with great photos, great content and a high degree of visibility will also truly be "appreciated." Finally, going the extra mile by providing franchisees with a dedicated Revenue Enhancement Manager who will deliver continuous support with Internet marketing, reservations optimization, group programs and more, including working with each property's management team to set and administer brand expectations, will not only be "appreciated," but it will be treasured -- all the way to the bank.

Focused on Fairness

As both a former franchisor and franchisee, I certainly understand and appreciate the challenges that come with wearing both hats. As a franchisor I can honestly say that I have felt “underappreciated.” And, as a former franchisee and also as a mediator of franchisee/franchisor disputes, it’s also easy to understand why an owner wants to run, not walk away from certain franchise agreement. But there is a happy medium, and as someone who rather looks at a glass as being half-full rather than half-empty, there probably are more examples of positive franchisor/franchisee relationships than there are negative ones. But the blame for souring relations can’t be cast to one party or the other. Instead, the blame typically rests within the franchise structure. With a fair franchising agreement negotiated from the outset, it's the franchisors who remove unreasonable fees and establish short-term contracts that will be most "appreciated." In turn, happy owners will pass along their enthusiasm for hospitality to their employees, which in turn will trickle down to their guests. After all, enhancing the customer experience is key to longevity and successful operations today.

In a 2010 report compiled by Forrester Research titled: "The State Of Customer Experience, 2010" it was substantiated that "90% of respondents think that customer experience is very important for their companies and 80% are trying to use it as an area of differentiation. While the lack of funding was the top problem in 2009, the lack of a clear strategy emerged as the No. 1 obstacle in 2010. So what's the obstacle today in providing exceptional customer service through hotel franchising? Perhaps it stems from a lack of appreciation.

So, I'm asking again: "Do you appreciate your franchise?" If yes, great! But if your goals are not being met, then perhaps there is cause to terminate the partnership and join a new franchise. The franchisor/franchisee relationship is truly the ultimate in power sharing and character building.

In the true spirit of hospitality, we need to revisit the Golden Rule and create a franchise whereby the franchisors "appreciate" the value the franchisees bring to their business, and franchisees "appreciate" the support, brand recognition and expertise their franchisor is delivering.

Perhaps in 2012, we can all celebrate "National Hotel Franchise Appreciation Day".

Vimana Franchise Systems LLC is a hotel franchise company owned by CEO Steve Belmonte, President Neal Jackson and Vice President Cory Jackson Jr. In May 2011, Vimana Franchise Systems launched the Centerstone brand as a three-segment franchise designed to create a fair and cost effective model for the hospitality industry. In November 2011, Key West Inns was re-launched under the Vimana Franchise ownership umbrella as a fun and uniquely themed leisure brand. For more information on Vimana Franchise Systems LLC, contact Steve Belmonte at (407) 654-5540 steve@vimanafs.com. Visit Vimana Franchise Systems online at www.VimanaFS.com. Visit Centerstone online at www.centerstonehotels.com, on Twitter at @Centerstonehtls, or on Facebook at www.facebook.com/Centerstonehotels. Visit Key West Inns online at www.staykeywesthotels.com, on Twitter at @StayKeyWest, or on Facebook at http://www.facebook.com/staykeywest. Mr. Belmonte can be contacted at 407-654-5540 or steve@centerstonehotels.com Extended Bio...

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