How to Buy a Hotel Franchise | Hotel Marketing
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There are different routes to take if you’re looking to go into hotel franchising. One way is to start a new franchise, and another is to add a property to an established brand, which can be national or international. Either way, there are a few things you should remember.
1. Assess your financial capacity
Keep your business assets in check, including your available cash to be used to fund a hotel franchise. Find the most suitable lender to discuss a business franchise loan. Prepare your financial documents like bank statements and tax records because lenders need to see them as proof of income. Let your lender know of your interest and what hotel franchise-type you have in mind.
2. Evaluate your training and experience
Assess your knowledge and expertise and how they apply to your prospective hotel ownership and operation. There’s a wide range of hotels, from budget to luxury and limited service to full-service ones. Hotels also cater to various market categories. Take time to analyze which type of hotel fits both your interest and skill set.
3. Decide on the property location
Once you’ve determined what you want and established your capacity to own the business, the next thing to consider is location. For example, you are looking to cater to travelers. Is the hotel strategically located? How far is it from the airport? Are there any tourist attractions nearby? Ensure that the hotel’s environment complements the property’s purpose.
4. Know your franchise opportunities
It is essential to examine the different available opportunities before taking a leap and committing to one. Hotel trade journals and the internet are valuable tools that can help you shortlist those that fit your requirements. Sometimes, franchised hotels get listed by commercial real estate agents. It is not a bad idea to approach brokers. They can help you locate the most suitable property for the best price.
If you have an existing hotel and want to put it under an established brand, plenty of “branding only” franchise opportunities are listed online. Carefully consider the pros and cons of each option before contacting the brand’s representative.
5. Contact the franchise company
Take your time in finding the right contacts. Get all the essential details such as email address, fax, telephone number, and street address-it is a simple but effective approach to obtaining further information. Ask for your shortlisted companies’ questionnaires. Just as you are learning important information about the franchise company, you will also have to supply them with details about your hotel. If you are interested in putting an existing hotel under a brand, you will be required to provide detailed descriptions of your plans, experience, location, and current operations.
6. Examine franchise disclosures
Once you’ve contacted your prospective franchise companies, the next thing to do is get franchise disclosures. By federal law, you have a 14-day disclosure examination period to study the franchise disclosure document and decide if you are to proceed with the purchase or not. In some states, they require a separate franchise disclosure document for opportunities within state boundaries.
We highly suggest hiring a marketing professional with established experience in hotel franchising to help you go through the franchise disclosure documents. A marketing professional can help you determine the documents’ accuracy and get a proper market analysis to confirm hotel operation’s potential success in your location.
7. Meet the hotel’s representative
Set a meeting with your chosen franchise company to put together a written franchise agreement. The contract must be mutually agreeable and suited to your hotel’s type and location’s demands. To ensure both parties’ interests are protected, get a legal professional with expertise in hotel franchising to review the agreement.
8. Submit the franchise agreement and disclosure
Once the agreement has been properly reviewed and signed, you may then send it to the lender and wait for the approval.
If we can be of help to your hotel marketing, reach out to us at www.bezla.com or give us a call at 888-999-8086.