AAHOA releases latest progress report on fair franchising

Chicago – The Asian-American Hotel Owners Association has made the promotion of fair franchising one of its main contributions to the lodging industry. Yesterday the organization released its latest progress report, and AAHOA executives lauded brands for continuing to show willingness to communicate on franchise issues and, in some cases, modify some practices.

“Especially during these difficult times, it’s important that we have an open dialogue with our franchisor partners,” said Tarun Patel, AAHOA chairman. “Our relationship with our franchise partners is the best it’s ever been. It doesn’t mean that we agree on all points, but we are all at the table with them.”

In particular, AAHOA executives noted its membership has pushed back on programs including Choice’s opt-in, opt-out program for online guest reservations, IHG’s enrollment standards for frequent guests, and Wyndham’s requirements for its purchasing program.

AAHOA issued its first 12 Points of Fair Franchising in 1998 and updated the points in 2006. Since then, the document has become a way for AAHOA to measure the franchise partners its members work with in terms of negotiating franchise terms and agreements.

For this year’s update, AAHOA invited its major franchise partners, Accor, Advantis, Best Western, Carlson, Choice, IHG, La Quinta, Red Roof, Vantage and Wyndham Hotel Group, to submit data on specific brand compliance with fair franchising. AAHOA also asked each franchise to answer three questions relating to royalty payments, default notices and letters of termination.

AAHOA executives said 2009 was a test for its franchise partners to prove they could uphold fair practices during tough times.

“We want to see who walks the talk,” said AAHOA President Fred Schwartz. “Running a franchise is not easy. People put their hard-earned money into it,” he said.

Laura Lee Blake, AAHOA’s VP of fair franchising and government affairs, and AAHOA general counsel, outlined some highlights for each brand. In particular, she noted that brands for the most part are being very helpful.

“All are bending over backward to help the distressed franchisees,” she said.

Following are some highlights of the report by brand, according to AAHOA:

Accor
• The company continues to work with franchisees case-by-case to grant extensions for new-construction and renovation projects
• The company created a Renovation Services Program to assist franchisees in completing the company’s Motel 6 renovation program on time, on budget and using cost-saving measures.

AdVantis Hospitality Alliance (Vista Inn, Select Inn, Vista Inn & Suites)
• AdVantis continues to offer a money-back reservations performance guarantee.

Best Western
• Best Western will extend all design requirement deadlines until Oct. 31.
• The company is allocating more money for sales and promotions, rather than issuing what Blake called “a token marketing fee reduction.”

Carlson
• Carlson launched a new guest bath amenity program that it says reduces cost by 7 percent compared to the former program.

Choice
• Choice said it would continue to communicate with its franchisee association to explore alternatives to its opt-in/opt-out program for online guest reservations. Blake called this “a big issue” for franchisees.

IHG
• The company in 2009 launched service and enrollment standards for Priority Club Rewards guests, which requires hotels to enroll a certain monthly quota of guests. Blake said AAHOA members expressed concern about this plan.

La Quinta
• La Quinta is flexible about granting construction extensions with fee waivers and does have provisions in place to terminate franchise agreements without liability for liquidated damages in some cases.

Red Roof
• Red Roof’s RediCard loyalty program contributes 23 percent of systemwide revenue, according to the company.

Vantage
• AAHOA applauded Vantage’s distribution programs.
• Vantage in 2009 launched ESPN, or Economic Stimulus Plan Now, which allows owners flexibility in paying fees.

Wyndham Hotel Group
• Blake said AAHOA members had expressed concern about the expansion of Wyndham Rewards, and Wyndham as a results changed the process for booking path enrollment into Wyndham Rewards “based on feedback from the franchisee community,” the report said.