The RESTART Act would establish a new federal loan program, the proceeds of which can be used for franchise fees.[i] The American Hospitality and Lodging Association (AHLA) is supporting the bill.[ii] Small businesses are the ones that really need support—not franchisors. See the article we wrote showing the big brands had over $11 billion in […]
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Ever wondered if other Courtyard franchisees got the same deal as you did? Now you can find out. Below find ten executed Courtyard agreements for you to download and read. They may not necessarily still be in effect. We have a collection of other brands’ agreements too, so look back here for more in the […]
After thousands signed a petition about unfair franchise fees from Choice Hotels, a group of Choice franchisees filed a lawsuit in US District Court on June 12th. The Wall Street Journal reported the lawsuit “claims the hotel company is burdening operators with inflated costs for goods and imposing duplicative fees to boost its own revenue.”[i] […]
The COVID-19 economic crisis in the hospitality industry means many owners are faced with an uncomfortable decision about whether to close their doors permanently. As you weigh the pros and cons, make sure you fully understand what your contract says about termination fees and liquidated damages—and how you could use them to your advantage. Marriott […]
This article explores three important contractual and statutory provisions related to franchise fee relief during the COVID-19 economic crisis. Two are franchise contract clauses: a force majeure clause, and a Business Interruption insurance clause. The third is the “impracticability” provision of the Uniform Commercial Code. This article is not intended to provide legal advice, and […]
We recently posted an analysis of the major US hotel brands’ liquidity, urging them to pause collection of franchise fees entirely. This post compares public statements by each of the major brands, rated by flexibility. Marriott Flexible Marriott stated in an SEC filing that it reduced the cost of certain systemwide service charges by 50% […]
During these challenging times, hotel owners and franchisees are within their rights to approach brand companies and ask for a break on fees. In an analyst call in March, Marriott CEO Arne Sorenson and CFO Leeny Oberg both acknowledged the difficulty that their franchisees and owners are going through, stated they were going to marketing […]
The major hotel brands had over $11 billion in combined liquidity in March and April, much of that having come from new fundraising since the outbreak of the coronavirus. They could afford to put a moratorium on collecting franchise fees. Hilton stated on April 16th that it expects their liquidity to last them 18-24 months, […]
We just released our latest guide for Marriott franchisees about what to watch out for when negotiating your franchise agreement. You can find it for free here. Marriott has included liquidated damages clauses in at least one of its franchise disclosure documents (“FDD”) requiring a franchisee to pay liquidated damages even if the franchisor is […]
Do you like your franchise arrangement? Do you hate it? What issues are you having? Fill out this 10-minute survey to help our research and legal teams focus on the issues most important to Marriott franchisees. This space is designed to provide franchisees with information they can use to press Marriott for fair treatment. Our […]