The New Franchising Dynamic

In recent months I've noticed some encouraging developments in the often-testy dynamic between franchisors and their licensees. The cynic will say it's just a sign of the widespread prosperity in the lodging industry. Business is up and everyone is making money, so why get into a beef with your franchisor?

But this new cooperative atmosphere goes beyond the glow everyone feels during good times. Some franchising companies are taking the time — actually going out of their way — to get their franchise customers more involved in the decisionmaking process that affects everyone associated with the brand.

Vantage Hospitality, the parent company of Americas Best Value Inn and the Lexington Collection, has made collaboration part of the company's DNA. As a membership group, ABVI management obviously needs to listen to and act upon member needs and opinions, but President & CEO Roger Bloss, his partners and management team go way beyond what's expected as minimum. At the brand's annual convention, at least one general session is scheduled to allow members to air criticisms, suggestions and even compliments. And even though the press is free to attend and report on these town hall-style get-togethers, they produce scant controversy and not much good copy. That's because management figurative and literally has its doors open to members all through the year, not just during the five days of convention. As a result, issues and potential problems are dealt with as they arise, not after they've had time to fester into serious situations.

Likewise, in developing the upscale Lexington Collection brand, Vantage leaders invited members and prospective members to a half-day planning session to collectively shape the vision for the brand. And, again, the press was invited to listen to and participate in the discussion.

The rationale for this approach is simple and effective. Franchisees (or members, in the case of Vantage) who buy into and help create a brand culture are less likely to gripe when problems bubble to the surface. They know chain management will be willing to listen to their points of view as they attempt to find solutions equitable to all.

Another great example comes from Choice Hotels, one of the oldest franchising companies in the business. Over the years, but not recently, I've been at Choice conventions where the buzz was all about the controversy du jour. The issue or issues precipitating the problems were brewing for weeks or months prior to the convention. As a result, the meetings accomplished very little as the focus was on these real or perceived problems. I remember one Choice convention in which an entire delegation of franchisees rose as one and left the general session in protest.

The last couple of Choice conventions were very different due to the way in which the chain developed its new Cambria Suites product. At the past two Choice conventions, franchisees had the opportunity to walk through prototype Cambria guest units and give their opinions on the design, ff&e and operational aspects of the project.

The licensees, most of whom are very accomplished developers and operators, had a number of specific, constructive and in some cases, creative suggestions to improve the product. One interesting idea from the franchisees was to replace the standard TVs in the prototype with flat-panel LCDs. In other chains, owners complain that franchisors mandate expensive upgrades like new bedding and flat-screen TVs. At Choice, the franchisee community recommended it.

Naturally, tensions will always exist between franchisees and their customers, but it's amazing the kinds of results that occur when business people take the time to talk with each other. Every chain should do it more often.

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© 2014 Penton Media Inc.


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