Finding the Best Franchise Deal Means First Finding the Best Assistance

By Steven Belmonte CEO, Vimana Franchise Systems LLC | October 28, 2008

Actually, sometimes it is just a prospective hotel owner, but whatever the case, it is always someone who has found frustration and confusion. The source of their problems is the contracts already entered into (or about to be entered) between them and the hotel franchise company. Whether I am in my office or attending a hotel-industry event, the conversation invariably is about problems that crop up between a hotel franchise company and a hotel owner.

Inference should not be drawn here that the problem in these matters has anything at all to do with devious franchise companies. While all of them are in the business of making money, none would survive for very long if they engaged in practices that are dishonest, unfair or morally bankrupt. So, it is clear that the problem is not that franchise companies are out to cheat potential and current franchisees. Precisely, the problem is that the franchise agreement is an intricate document designed to deal with as many situations as possible in favor of the side that draws up the contract-namely, the franchise company.

Besides, the franchisors and the executives they have hired are in possession of decades of experience, not only in the franchising arena, but also the hotel industry or other areas of hospitality. They have an ingrown advantage in dealings with hotel owners and that is something that will never change for as long as business is done.

The obvious solution is for the hotel owner to come as close as possible to simulating for himself the vast wealth of experience working in the favor of the franchise company. Knowledge must be drawn on wherever it is available, but it must be knowledge gathered with a critical eye and the realization that it is seldom the case that any two hotels' circumstances are exactly alike. Thus, what the potential hotel franchisee learns from a current franchisee must be taken with a grain of salt. No two businesspeople do business in exactly the same way, and no two hotels' properties can be run in an identical manner.

Hotel franchisors are already aware of this truth, and will go to great pains to prepare franchise contracts that are specific to the nature of the property involved. These companies have expertise in information gathering, historical data and travel-and-tourism patterns (to name a few items), and they know how to put all that data to very good use.

All of this is also pertinent to those hotel owners who are already in franchise agreements, and who now seek to be relieved of those agreements. There is an axiom about it being far more difficult to get out of a business contract than it is to enter one, and it seems that in all fairness the opposite should be true. But facts are facts, and whether entering a franchise agreement or seeking exit from one, the hotel owner must be as prepared and informed as is the franchise company.

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Coming up in February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.