At first glance, franchising might not seem like a traditional product to shop for. And while it’s not exactly a physical product one can see, touch or sit on, owners and developers must do their due diligence in evaluating franchisors to make sure they’re choosing the right one for the right project in the right location.
And while many owners and developers are familiar with franchising, having been in the game a long time, Gerry Chase, president and COO of New Castle Hotels & Resorts, noted that there are also a lot of new players interested in franchising, compared to the past. “Franchising has evolved to include a broader group of developers,” he said. “In the mid 1980s, [New Castle] was one of a very few companies approved to franchise and operate major brands. Now, anyone who can pull together the capital can launch a career as a hotel developer. The brands are much more inclusive now, and more effective at training and helping new developers who are interested in the hotel sector.”
So what should hoteliers think about when selecting a franchise for a particular project?
Specific things for hoteliers to consider: projected valuation, available shelf space, and how they drive reservations, said Chase.