HVS’ Franchise Fees Part II Helps Franchisees Choose The Right Flag

MINEOLA, NY— HVS International has released its 2001 Franchise Fees Analysis Guide, Part II— a comprehensive follow-up to the Part I Guide— aimed at helping franchisees select the proper flag for their property. While Part I gives potential franchisees a general picture of the 10-year cost incurred to brand a hotel under a particular flag, the second part of the report provides a detailed breakdown of miscellaneous fees and offers the most recent occupancy, ADR and RevPAR statistics for the surveyed set of brands. “The intention in publishing these guides is for Part I to help franchisees narrow options down to a finite set of brands and for Part II to help make the final decision. Part II is more of an information piece for in-depth comparative analysis,” said William Lee, associate at HVS Internationals New York office. The 2001 Franchise Fees Analysis Guide, Part II is broken into three distinct segments. Each segment offers a comprehensive chart of vital information that aids in a comparative analysis of the chains. Segment I provides most recent ADR, occupancy and RevPAR statistics for the brand, in addition to detailing the liquidated damages a franchisee would incur, should the decision be made to reflag the hotel or terminate the contract early. “Segment I is important because it gives an overall idea of how the franchise has been doing, how many properties it has in operation, and how steep its penalties are,” said Lee. Segment II of the Guide, according to Lee, details the exact percentage of revenue a franchisee can expect to pay for royalty costs, marketing costs and other items that would be incurred in addition to a brands established fixed costs. Finally, Segment III, which, according to Lee, provides the most important information, breaks down miscellaneous fees for each brand included in the survey. “Miscellaneous costs can be easily overshadowed by costs associated with royalty, marketing and frequent traveler programs. Armed with the information from the Part II Analysis, coupled with that included in Part I, an owner/operator can determine the overall cost of affiliation and directly compare the actual costs of different brands,” said Lee. Although the 2001 Franchise Fees Analysis Guide, Part II was only released about a week ago, Lee told HOTEL BUSINESS® that it has been extremely popular. HVS International sells copies of the Guide to interested parties for $600. Part I is offered for $295.