PARSIPPANY, NJ— Cendant Corp.’s Hotel Group introduced discounted franchise fees for its Howard Johnson and Travelodge brands designed to stimulate their growth. The Sweeten the Deal program, which applies to 15-year conversion agreements and 20-year new construction agreements, offers the lesser of a flat fee or annual fee percentage rate for the first five years of the franchise term, ranging from $500 to $675 per room or 6.25% to 6.75% for Travelodge hotels and $600 to $775 per room or 6.5% to 7% for Howard Johnson hotels, depending on property size. The new fee structure represents a 1.75% to 2.25% discount for Travelodge franchises and a 1.5% to 2% discount for Howard Johnson franchises. Flat rates previously were not offered. The program also features a “test drive” that allows new franchisees to exit the system without penalty by giving notice after 30 months. The termination would be effective at the end of the 40th month, provided they have met certain criteria. After three years, as an additional incentive, new franchisees can transfer their franchise to either a Travelodge or a Howard Johnson hotel free of charge (if it is available in the market and if the property opens by the deadline established in its license agreement.)
