When entering into a contract with a hotel franchise, many issues must be considered. The franchising contract should be fully understood by all parties and signed with a legal counsel present. Appropriate business advisors, such as an accountant, attorney, and business consultant, should review it. The contract must contain a termination and transfer provision as well as a statement of rights to renew contract.
A few positive areas of entering a hotel franchise may include:
• Formalized training
• Financial assistance
• Proven marketing and operating methods
• Managerial assistance
• Quicker startup time
• Overall lower failure rates
The franchisor may have control over the franchisee is certain areas. This may include:
• Restricting of sales territory or growth
• Franchise fees and initial investment
• Royalties and advertising costs
• Requiring site approval and imposing requirement on the outlet’s appearance
• Restricting the goods or services that can be sold
• Requiring specific operating hours
• Controlling advertising
When entering a hotel franchise contract, it is important to cover and understand all items within the Uniform Franchise Offering Circular (UFOC). If you are looking to enter into a franchise, it is important to seek legal advice. Please contact the law office of Craig M. Dorne for more information. Our offices are located at 3132 Ponce de Leon Boulevard Coral Gables, Florida 33134 or call us at (305) 531-7890.
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