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In hospitality, unique experiences and brand recognition are paramount. The hotel franchising concept can be an excellent avenue for established hoteliers and aspiring entrepreneurs alike. It offers a method of expanding a hotel brand by granting rights to franchisees, who then get access to the franchisor’s support and expertise. This article will explain which hotel brands are franchisable and how hotel owners can adopt a franchise model.
Hotel Franchises in the UK
Hotel franchising is a business model where the owner of a hotel brand grants rights to independent operators (franchisees) to replicate their business in new locations. In the UK, popular franchised hotel brands include:
- Travelodge;
- Radisson Blu;
- easyHotel; and
- Days Inn.
Franchising any hotel business requires much thought and robust strategic planning. The following sections describe essential steps a hotel owner should take to franchise their brand.
1. Assess Franchisability
The first step is to assess whether your hotel brand is franchisable. There is no one-size-fits-all approach to this type of assessment. Instead, it is a comprehensive review of your brand, specifically its operating processes. A replicable brand will have a better chance at franchising success.
Whether a franchisee could easily replicate your concept determines whether it is franchisable. Consider your hotel concept and see if you can capture it in words. Consider whether somebody else can understand it and translate it into a viable business. If so, you likely have a replicable business model.
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2. Document Operations and Systems
If your hotel brand is franchisable, you should create a comprehensive manual detailing how a franchised brand unit will operate. This document will become the franchise operations manual. It will outline every aspect of running a successful hotel under your brand. It will also include information on recruitment processes and staffing information, such as guest services, marketing and maintenance.
3. Financial Modelling
Next, develop a financial model for your franchise system. Determine factors such as:
- initial fees;
- ongoing royalty payments; and
- other necessary financial arrangements.
Factor in the investment you require from franchisees and their potential return on investment.
4. Develop a Training Program
Franchisors must train and provide ongoing support to their franchisees. They can do this themselves or recruit a support team to assist them. Such support systems may deal with marketing and operational assistance, for example.
Before recruiting any franchisees, you should develop a comprehensive training program that will prepare new franchisees for their roles. Through the program, they will learn the necessary skills to replicate the successful operations of your existing hotel.
5. Seek Legal Advice
Consult legal professionals to ensure your franchise model complies with all relevant laws and regulations. A lawyer can help you draft a franchise agreement that protects your brand’s best interests. They can also secure your trade marks, such as your brand name. Working with a lawyer ensures that you mitigate the risk of costly legal disputes in the future.
Also, with each new unit, you must ensure that it obtains the necessary permits and licences. For example, most hotels serve alcohol and food. You must apply for an alcohol licence and meet food hygiene requirements.
This handbook covers all the essential topics you need to know about franchising your business.
6. Franchisee Selection and Recruitment
Before actively looking for franchisees, consider the criteria you want them to meet. What characteristics must somebody have to run a successful unit of your hotel brand? Perhaps you would like them to have prior experience in the hospitality industry and alignment with your brand’s values. Enter the franchisee recruitment process with these qualities in mind.
When you find a potential franchisee, you should interview them and conduct thorough due diligence. If they are a suitable candidate, allow them time to read and sign the franchise agreement and then onboard them, providing the initial training program.
7. Evaluate and Develop
Grow your network by recruiting additional franchisees. Once you have established your franchise network, you should continuously evaluate its performance and be open to making necessary adjustments to maintain its competitive position. Gather feedback from your franchisees and monitor market trends. Based on your evaluations, adapt your strategies to ensure your hotel franchise network’s long-term success.
Key Takeaways
To franchise a hotel business, a prospective franchisor should:
- assess whether their brand is franchisable;
- create essential franchising documents such as the operations manual;
- produce a solid financial plan;
- develop a comprehensive training program and support mechanisms;
- seek legal advice to protect their brand and mitigate risk;
- select new franchisees carefully; and
- evaluate and evolve their brand based on changing market trends and franchisee feedback.
If you need legal advice about franchising your hotel business, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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