Marriott International has decided to end its relationship with AAHOA in response to the organization's "12 Points of Fair Franchising," which Marriott says runs counter to its business model and interests.
In a letter obtained by Hotel Management, Marriott writes that it "cannot support, either by endorsement and/or financially," any organization that promotes policies that run counter to its own. "We believe quite strongly that the longstanding relationship between Marriott and AAHOA has proven to be mutually beneficial, and we are deeply saddened that AAHOA has chosen to pivot its stance on these key issues in a way that is decidedly anti-franchising and anti-Marriott," the letter says.
Marriott also writes that AAHOA's support of a New Jersey franchising bill, which seeks to tighten control over franchisors, including fully disclosing commissions/kickbacks; restricting vendor exclusivity; prohibiting fees not disclosed in FDDs; and proper compensation when franchisors sell loyalty points to guests, "left us with no choice but to formally disengage from the organization."
The letter Hotel Management obtained is addressed only to a "Danny," and it's unclear whether it was officially issued by Marriott to AAHOA officers or its president and CEO, Laura Lee Blake.
Marriott International has not yet responded to an email asking for comment.
Neal Patel, the current chairman of AAHOA, wrote a letter to AAHOA membership addressing the letter, writing in part: "The tone and content of the draft letter are very serious and explicitly state where Marriott stands in relation to AAHOA and fair franchising. AAHOA leadership has been in communication with Marriott over the past several weeks, and we are surprised and saddened that this draft letter was released in a public forum."
Marriott will no longer sponsor or participate in AAHOA events, including its annual convention. However, it writes that it will continue to foster relationships with AAHOA members as its owners and franchisees.
AAHOA members, it's estimated, make up around 60 percent of all hotel owners in the U.S.
Much of Marriott's consternation is over AAHOA's 12 Points of Fair Franchising, "a best-practice approach to designing, developing, and implementing best-in-class, mutually beneficial franchise systems." It was first introduced in 1998 and is continuously updated. The points cover entities such as liquidated damages, quality guarantees, vendor exclusivity, dispute resolution, franchise sales ethics and choice-of-law clauses.
Marriott formally detaching from AAHOA could have a ripple effect throughout the hotel industry, should other lodging franchisors, such as Hilton, IHG Hotels & Resorts, Wyndham Hotels & Resorts and Choice Hotels International, follow suit.
Hotel Management has learned that AAHOA President and CEO Laura Lee Blake will be issuing a release in response to Marriott's letter, but has yet to release it publicly.
This is a developing story and will be updated.