Franchise Agreement Vs Management Agreement

Posted by Admin on Dec 9, 2020 in Uncategorized |

In cases of franchise or management, the parties may agree to an additional service. Most hotel groups offer a number of optional services tailored to specific needs throughout the hotel`s lifecycle. In the hospitality and restaurant sector, there are a number of major players and interest groups involved in the management of a successful hotel. Hotel brands, hotel owners and management companies often work together to create transformations and combinations of business models to maximize profitability and increase customer satisfaction. The question to the hotel owner is: “How do you choose between a franchise operator contract or a hotel management contract?” and “Which model is best for your hotel?” The purpose of this article is to provide a brief overview and comparison between the two operating models of the hotel industry. Below are the terms of a legal agreement (“Agreement”) between you and HotelExecutive. By accessing, surfing and/or otherwise using this website, HotelExecutive, you recognize that you have read, understood and accepted these terms and conditions and that you comply with all applicable laws and regulations, including U.S. export and export control laws and regulations. If you do not agree with all these terms and conditions, you cannot access HotelExecutive, search and/or use it. Materials provided on HotelExecutive are protected by law, including, but not limited to, U.S. copyright and international treaties.

In this case, the hotel group (e.g. AccorHotels) is the franchisor, and the owner of the hotel (z.B. an individual) is the franchisee. You sign a franchise agreement for a specific hotel brand (z.B. ibis). Overall, the management contract allows the owner to enter the hotel industry, even with limited experience, to make hotels and take advantage of the profits if the company is doing well. But this entails the cost of a higher operating and market risk, while the hotel brand handles all management issues. On the other hand, the franchise agreement gives the owner the right to operate the hotel itself under a brand or flag and to have access to technological skills, sales and marketing systems in exchange for loyalty fees. This is suitable for hoteliers who already have a hotel experience and who want to commit daily to running their own hotel.

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