Franchise Agreements SPRinG 2014 California Hotel & Lodging Association 11 Current Developments 2014 By Mitch Miller, Miller Law Group, P.C. A franchise is one of the most important agreements that will affect the long term success of the hotel investment. Which brand? There is no standard answer. The unique factors of your project (location, facility, competition, market dynamics, costs of operation, etc.) must be matched to the brand(s) that best satisfies the criteria. Usually, all other factors being comparable, use the brand that will deliver the best rate, which will maximize both revenue and value. Caveat: the brand selected should not unnecessarily require costs of operation that diminish profitability, thereby reducing the value of the hotel. Franchisees face difficult challenges as established franchisors become increasingly powerful and their agreements are ever more one-sided. Prior to any litigation, successes can be achieved when we present our case, based on a thorough investigation and presentation of the facts and the documentary evidence, founded in law, not hopes and desires, and asserted confidently yet reasonably. Wherever you may be operating your business, make sure that your professional advisors understand your business and this area of the law so they will be able to provide the best counsel. TIP Investigate the franchisor’s record in dealing with franchisees during the term of the agreement. The contracts provide minimal protection. The good will and attitudes of the franchisor are critical in determining how well the franchisee will fare during the course of the relationship.
CHLA Spring 2014
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