Please complete the assignment "Real-world Challenges 14.1" from your text (page 513). Feel free to use outside sources (properly cited using MLA or APA guidelines. Your assignment submissions should be 1 to 2 pages in length.
We wanted to get your input, Dichondra, because you are closest to the operation,” said Jonathon Mark. Jonathon, known to Dichondra Johnson as “Jon,” was the head of the investment group that owned the 400-room full-service hotel at which Dichondra was the GM.
“As you know,” continued Jon, “we have a window coming up on our franchise agreement with Premier Hotels. If we are going to switch flags, we need to make a decision within the next sixty days.”
Dichondra was aware that meetings had been held between the owners of his hotel and an alternative franchise company. In their efforts to secure a franchise agreement with Mark’s group, the new franchisor was offering very attractive reductions in royalty and reservation fees for the first three years of the agreement.
“What we need to understand better,” said Jon, “is exactly what the impact would be of changing flags. We are especially concerned about conversion costs in their PIP and the new franchise company’s short-term ability to drive revenues through their 800 number and website.”
Franchise agreements are complex and are increasingly important. They should be entered into only after a great deal of consideration and with expert assistance. The fact is, however, that only a few hotels can survive without a nationally recognized brand affiliation. As a result, GMs must become adept at operating hotels in the best interest of their owners as well as in compliance with their owner’s franchise agreement.
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