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7 Easy Tips To Help You Purchase A Hotel Or Motel Franchise Business

Written by: Candice Clem

Article Overview: If you're considering a new franchise business, consider that a hotel or motel franchise takes a much larger initial investment than most other franchises, but can have a huge payoff once it's up and running. Read on to find out more about the ins and outs of Hotel and Motel franchises.

7 Easy Tips To Help You Purchase A Hotel Or Motel Franchise Business

With the recent slump in the economy, many entrepreneurs are weighing their options very carefully before jumping into a new investment or business opportunity, yet the fact that many are choosing to wait to see what happens to the economy could give the prospective business owner a jump on the competition and the kick-start needed to overcome the struggling economy. One such industry with great potential is hotel and motel franchises. These high capital franchises take quite a bit more to get going than the average small business but the payoff can be exponentially higher and if you follow some of the following tips, you’ll be on your way to starting your new hotel or motel franchise in no time.

1) Stay in the Hotels You’re Looking at
If you’re in the market to start a hotel, chances are you have some experience with the hospitality industry and you’re at least beginning to become acquainted with the franchisor you’re interested in. But knowing how a hotel or motel franchise is supposed to run is far different than knowing what a specific hotel’s daily practices actually look like, so one of the best things you can do is study the business from a guest’s point of view. If you’re curious about Hawthorne Suites, get a room for a week at one of their locations and do some first-hand research. You’ll learn more than a pamphlet can ever teach.

2) Talk to Other Franchisees
This is a good step for someone starting a franchise in any industry. Your interest, as a potential Choice Hotels franchisee for example, is not only in how the business treats its guests, but also it’s franchisees, and the only way to learn that is to go and talk with men and women who have already walked that road. Find some nearby franchises and ask to talk to the owners. Ask them about what they like and would like to change about the way their franchisor relates to them, how the purchase process went, and what kinds of ongoing support the franchisor still provides.

3) Seek Wise Council Early in Negotiations
Experts recommend that a new franchisee never even begin to make high capital franchise deals without finding wise advisors to help influence the decision-making process. There is no shame in getting the help of a whole team of seasoned businesspeople to help you navigate the negotiation process with your franchisor, and if you can do so before the deal term sheet is printed by your franchisor, you’ll have a lot more leverage in the long run.

4) Negotiate Anything and Everything
The most important thing to know when you go to the table with a franchisor is that you are not at their mercy; the two of you are making a mutual agreement, and the agreement needs to be agreeable to both parties. Whatever you have a problem or concern with in the agreement, as it is drawn up, tell the franchisor what it is and what you want. When you’re looking to get into a Wingate by Wyndham franchise, it is as much in their interest that they accommodate you as it is in yours that you accommodate them—and they have more leeway than they let on.

5) When Converting an Old Hotel, Inspect it
It’s a really straightforward recommendation, but if you’re remodeling an old hotel instead of building a new one, be sure to get every nook and cranny inspected. The last thing any franchisee wants is to spend the money for the perfect business only to find that there are structural, sewage, or electrical problems with the facility halfway through the opening year. Save yourself future headaches by being sure the real estate investment is sound.

6) Research the Local Competition
When it comes to choosing the placement of the hotel franchise you’re going to buy, it’s important to know all you can about the area you’re looking at, and competition is a big part of that. Even though Microtel Inns and Suites is the premium name in economy hotels, putting your franchise in an area overly filled with other economy locations is not the wisest of business tactics.

7) Do Your Homework on Local Development
Chances are good that a franchisor is already well aware of what’s going on in any area in which they’re proposing to start a franchise hotel, however, doing your own research can never hurt. For that reason, when looking at a potential location for your business, make a call to the local government agencies in charge of land development and road construction. See what future plans are in store for the highways and roads of the area, whether there will be more access to your location or less, and ask about what the outlook for residential, commercial, and industrial expansion is. Make sure that in a few years, the location will be even more hospitable to your business than it is now.

Hospitality is an excellent industry that has been with us for millennia and has proven profitable for millions, so starting hotel franchises is certainly a good idea. Like all things, though, it just has to be done correctly, and the earlier in the process that a franchisee starts doing things the right way, the better. These helpful tips may not make everything run perfectly, but they can provide a good start and the confidence that a new business owner needs to succeed.

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  Lodging Franchise Opportunity
  Motel Franchises
  Hotel Franchising
  Best Western India Franchise to add 10 more hotels by 2009 end
  Reasons to Invest in Hotel Industry Franchises

Article Tags: business opportunity, business owner, capital franchises, choice hotels, franchise, franchisee, franchisees, franchisor, great potential, hawthorne suites, hospitality industry, men and women, negotiations, new hotel, ongoing support, pamphlet, point of view, prospective business, slump, small business



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Top performing Franchise Loans - Evan, There are over 120 Franchises listed by the SBA with 0% Loan Failure from 10-1-00 to 9-30-05 these companies have at leat 10 loans disbursed. A number of the companies are Hotel/Motel Franchises so I listed them separately. Since all the ones listed have 0% loan failure I listed them descending by # of loans disbursed. Top 20 (by # loans Disbursed) 0% SBA Loan Failure (does not include hotels/motels) 1 21425--CULVER'S FROZEN CUSTARD 85 2 66910--PRIMROSE SCHOOL (DAYCARE) 76 3 14467--CARTRIDGE WORLD STORES 54 4 68021--QUIZNO'S SUBS 41 5 06560--AUNTIE ANN'S (SOFT PRETZELS) 40 6 29912--FIREHOUSE SUBS 35 7 31154--FOOT SOLUTIONS 35 8 52707--MEDICAP PHARMACY 35 9 09802--BEN & JERRY'S ICE CREAM 33 10 67759--COMFORT SUITES 33 11 70150--RITTER'S FROZEN CUSTARD 32 12 05650--ARBY'S 31 13 65160--PLATO'S CLOSET 31 14 67417--PUMP IT UP 30 15 69149--REMAX 30 16 71456--SALAD WORKS, INC. 30 17 76282--SONIC DRIVE-IN 27 18 84725--UNION 76 OIL 27 19 17049--CHRISTIAN BROTHERS AUTOMOTIVE 26 20 78950--SUNOCO SERVICE STATION 26 Top 10 0% SBA Loan Failure Hotel/Motels 1 10275--BEST WESTERN INN 104 2 67750--COMFORT INN 98 3 38605--HOLIDAY INN EXPRESS 87 4 36680--HAMPTON INNS 57 5 53165--MICROTEL 33 6 75385--SLEEP INN MOTEL 26 7 04160--AMERIHOST INN 18 8 69134--RED ROOF INN 13 9 17230--CLARION INN & SUITES 11 10 20715--COUNTRY INN 11
Business Tips - How about: Tips for managers to handle employees more effectively? Tips on how to deal with difficult customers? Tips on how to deal more effectively with suppliers? The only three I have in mind right now, but will try to come up with something else. Chris
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]


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