This document compares and contrasts hotel franchise agreements and management agreements. Under a franchise agreement, the hotel owner is licensed to use the franchisor's brand and systems but maintains responsibility for operating the hotel. The franchisor provides training, brand standards, and centralized marketing. Fees typically include an initial fee, continuing royalty fees based on room revenue, and marketing/reservation fees. Under a management agreement, the operator is responsible for daily operation of the hotel in exchange for fees such as a base fee based on gross revenue and an incentive fee based on profits. The owner remains responsible for maintaining brand standards and costs while benefiting from the operator's expertise.
This document discusses hotel franchising. Some key points:
1) Hotel franchising is an attractive means for international expansion as it has lower risk than equity-based strategies.
2) Hotel franchises frequently involve a management contract arrangement where a third party operates the franchised property.
3) Franchise agreements allow hotel owners to access a brand name and support services in exchange for fees paid to the franchisor.
A brief idea about Types of Hotel Ownership.Are you thinking about investing in a hotel and wondering about the different types of hotel ownership? You might envision yourself at the helm of a successful B&B operation or walking the halls of your own hotel. There are several types of ownership models and methods to achieve your dream. There are two primary kinds of hotels: independent and chain. That doesn’t mean that if you own a hotel you can’t be part of a popular chain. Within the two designations are several options for ownership.
This document discusses risk management in Islamic finance, specifically for Takaful (Islamic insurance) operations. It identifies five main types of risk for Takaful operators: underwriting risks, operational risks, credit risks, liquidity risks, and market risks. For each risk, it provides examples of how the risk can occur in a Takaful context. It then outlines several ways Takaful operators can manage each of these risks, such as establishing standard underwriting procedures, recruiting skilled IT professionals, implementing liquidity ratios, and exploring Shariah-compliant hedging instruments. The document emphasizes that effective risk management is important for Takaful operators to provide protection in accordance with Islamic principles.
Third-party distributors sell mutual funds and life insurance policies on behalf of fund managers and insurance companies. They receive trailer fees from the sale of mutual funds and commissions for acquiring new business. Mutual funds are distributed through five main channels: direct sales, advice from financial professionals, employer-sponsored retirement plans, fund supermarkets with no-transaction fee programs, and large institutional investors.
This document discusses trade credit insurance and credit protection solutions offered by Euler Hermes that can benefit banks. It summarizes various products available, including medium-term coverage up to 7 years, supply chain finance, export finance, trade finance, asset finance, and bank finance. Insuring transactions through Euler Hermes provides banks insight into customer risk profiles, protection against non-payment, and stability. Euler Hermes has the financial strength and global expertise to effectively insure and monitor bank portfolios. Their solutions can help optimize risk-weighted assets for banks under Basel III regulation.
This document provides an overview of transactional insurance capabilities with a focus on representations and warranties (R&W) insurance. It discusses how R&W insurance can insure against breaches of warranties made during a merger or acquisition by either the buyer or seller. It also briefly outlines other specialized insurance solutions like tax opinion insurance. The document reviews trends in the use of R&W insurance, including rising adoption rates in North America, Europe and the UK. It also presents data on typical policy limits, pricing and the timing of claims.
This document discusses rate of return risk in Islamic finance. It defines rate of return risk as the potential impact of changes in market rates of return on an Islamic bank's net income or equity value. Rate of return risk exists for Islamic banks because they use conventional interest rates as benchmarks, exposing them mismatch risk between asset and liability rates. The document outlines various techniques Islamic banks can use to manage this risk, such as diversifying assets, securitization, and off-balance sheet hedging methods. Managing rate of return risk is important for Islamic bank profitability and competitiveness.
This document discusses a framework for digital trust that can handle multiple transaction types and assurance levels between multiple service seekers and providers. It proposes a technology-agnostic approach using unified APIs to manage credentials and policies over the full lifecycle. Complex interactions ultimately involve two main parties, with other entities like identity providers acting as controls to enhance trust between the parties. Trust relationships can be broken down into components along five vectors: identity, terms, subsidiary rights, enforcement, and context.
This document discusses hotel franchising. Some key points:
1) Hotel franchising is an attractive means for international expansion as it has lower risk than equity-based strategies.
2) Hotel franchises frequently involve a management contract arrangement where a third party operates the franchised property.
3) Franchise agreements allow hotel owners to access a brand name and support services in exchange for fees paid to the franchisor.
A brief idea about Types of Hotel Ownership.Are you thinking about investing in a hotel and wondering about the different types of hotel ownership? You might envision yourself at the helm of a successful B&B operation or walking the halls of your own hotel. There are several types of ownership models and methods to achieve your dream. There are two primary kinds of hotels: independent and chain. That doesn’t mean that if you own a hotel you can’t be part of a popular chain. Within the two designations are several options for ownership.
This document discusses risk management in Islamic finance, specifically for Takaful (Islamic insurance) operations. It identifies five main types of risk for Takaful operators: underwriting risks, operational risks, credit risks, liquidity risks, and market risks. For each risk, it provides examples of how the risk can occur in a Takaful context. It then outlines several ways Takaful operators can manage each of these risks, such as establishing standard underwriting procedures, recruiting skilled IT professionals, implementing liquidity ratios, and exploring Shariah-compliant hedging instruments. The document emphasizes that effective risk management is important for Takaful operators to provide protection in accordance with Islamic principles.
Third-party distributors sell mutual funds and life insurance policies on behalf of fund managers and insurance companies. They receive trailer fees from the sale of mutual funds and commissions for acquiring new business. Mutual funds are distributed through five main channels: direct sales, advice from financial professionals, employer-sponsored retirement plans, fund supermarkets with no-transaction fee programs, and large institutional investors.
This document discusses trade credit insurance and credit protection solutions offered by Euler Hermes that can benefit banks. It summarizes various products available, including medium-term coverage up to 7 years, supply chain finance, export finance, trade finance, asset finance, and bank finance. Insuring transactions through Euler Hermes provides banks insight into customer risk profiles, protection against non-payment, and stability. Euler Hermes has the financial strength and global expertise to effectively insure and monitor bank portfolios. Their solutions can help optimize risk-weighted assets for banks under Basel III regulation.
This document provides an overview of transactional insurance capabilities with a focus on representations and warranties (R&W) insurance. It discusses how R&W insurance can insure against breaches of warranties made during a merger or acquisition by either the buyer or seller. It also briefly outlines other specialized insurance solutions like tax opinion insurance. The document reviews trends in the use of R&W insurance, including rising adoption rates in North America, Europe and the UK. It also presents data on typical policy limits, pricing and the timing of claims.
This document discusses rate of return risk in Islamic finance. It defines rate of return risk as the potential impact of changes in market rates of return on an Islamic bank's net income or equity value. Rate of return risk exists for Islamic banks because they use conventional interest rates as benchmarks, exposing them mismatch risk between asset and liability rates. The document outlines various techniques Islamic banks can use to manage this risk, such as diversifying assets, securitization, and off-balance sheet hedging methods. Managing rate of return risk is important for Islamic bank profitability and competitiveness.
This document discusses a framework for digital trust that can handle multiple transaction types and assurance levels between multiple service seekers and providers. It proposes a technology-agnostic approach using unified APIs to manage credentials and policies over the full lifecycle. Complex interactions ultimately involve two main parties, with other entities like identity providers acting as controls to enhance trust between the parties. Trust relationships can be broken down into components along five vectors: identity, terms, subsidiary rights, enforcement, and context.
The document discusses employee induction and orientation programs. It explains that orientation is the first step for new employees to familiarize themselves with the work environment, policies, culture and people. The Toyota orientation program is then described in detail over four days, with a focus on communication training, teamwork, problem solving and health and safety. The goal of the program is to socialize new employees and ensure they understand and adopt Toyota's values and mission around quality.
Induction of Labour: SOGC, 2013 WHO, 2011 NICE, 2008Aboubakr Elnashar
This document provides guidelines for the induction of labour. It defines induction of labour and discusses appropriate settings and timing. It outlines indications and contraindications for induction and methods for assessing cervical readiness. Finally, it reviews various methods for cervical ripening and labour induction, including mechanical and pharmacological options like misoprostol and prostaglandins, and their risks and benefits. Monitoring of the mother and fetus during induction is emphasized.
GCC Hotel Management Contracts Survey - February 2015John_Podaras
Review of the main commercial terms for 61 management contracts between owners of hotels in the GCC and international hotel management companies.
Survey carried out in February 2015 by Hotel Development Resources, Dubai with the support and assistance of the office of Al Tamimi & Co.
This document discusses various aspects of contract management for construction projects including methods of work execution, types of contracts, and the tendering process. It describes executing work through amanat (directly by the owner) or through contracts. It outlines various types of contracts like lump sum, unit price, cost reimbursable, design-build, and BOOT/BOT. Finally, it explains the tendering process which involves preparation, tender notice, tender document, conditions of contract, prequalification, evaluation, and selection/award.
Template for new employee induction program - Suitable for all kinds of organ...Anand Mehta
This is an Induction Program Template that is suitable for all kinds of organizations. It allows for customization based on the scale and primary functions within most organizations
Induction of labour is defined as inducing labour after 28 weeks of gestation but before spontaneous onset of labour, with the aim of vaginal delivery. Common indications for induction include post-term pregnancy, hypertensive disorders, diabetes, and premature rupture of membranes. Methods for induction include mechanical methods like laminaria tents, surgical methods like artificial rupture of membranes, and medical methods using prostaglandins or oxytocin drips.
Induction training helps in the integration of newly-hired employees in and across the organization. Let's look at a presentation on "Successful Implementation of Induction Program for New Hires".
This document discusses induction and augmentation of labor. It begins by defining induction of labor as artificially stimulating uterine contractions before the onset of labor, while augmentation refers to stimulating inadequate spontaneous contractions. The document then covers the structures and physiology of the cervix as it relates to ripening. It discusses various methods of assessing cervical status including Bishop's score and indications, contraindications, risks and prerequisites for labor induction. The document provides an overview of common methods used for cervical ripening and labor induction.
The document discusses induction of labour, including its definition, mechanisms, indications, contraindications, methods, and complications. Some key points include:
- Induction of labour is the artificial initiation of labour prior to its spontaneous onset.
- Common methods include membrane sweeping, amniotomy, prostaglandins like misoprostol and dinoprostone, and oxytocin administration.
- Indications include post-term pregnancy, pre-eclampsia, diabetes, and fetal growth restriction. Contraindications include malpresentations and previous uterine scarring.
- Factors like maternal and fetal well-being as well as cervical status via Bishop score are assessed prior to induction.
- Comp
In less than 30 minutes, this Guide to Contract Management clarifies how to manage contracts. Follow practical steps to control contract risk and improve financial performance. The Guide provides specific recommendations about what contract data to track.
Learn about the 5 principles of contract management. These principles elevate contract management from an administrative burden to a vital risk management function.
In this presentation, we will help you understand about franchising, history, types, various advantages and disadvantages of franchising.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
Management services contracts involve one company providing managerial expertise to another for a specific period of time. They allow a company to exploit an international business opportunity without placing all its physical assets at risk. There are two main types of knowledge transferred - specialized technical management knowledge and general business management skills. While they provide opportunities to develop local skills, they also carry risks like nurturing new competitors or endangering managers in unstable locations. An example given is Heathrow Airport Holdings operating airports in the US under long-term contracts.
Effective contract management requires planning throughout the entire contract lifecycle from upstream preparation and downstream execution. Key aspects of successful contract management include establishing clear roles and responsibilities, managing stakeholder expectations, monitoring performance metrics, addressing changes or issues that arise, and conducting a review at contract closure to capture lessons learned. Proper risk assessment and relationship management also help facilitate positive outcomes from contracts.
2. Article - Critical Elements of a Hotel Management Agreement - Apr 2016, Ho...Beni Agrawal
1) Hotel management agreements typically last 10-15 years to allow brands to stabilize revenue during the first 2-3 years when effort is high but revenue is lower. Shorter terms may be taken by new domestic brands looking to quickly scale up.
2) The agreement outlines operator fees such as signing fees, technical service fees, base fees, incentive fees, and marketing fees which usually total 6-8% of gross revenue. It also specifies the obligations of the owner to fund operations and approve annual business plans.
3) The agreement defines the brand's obligations to manage the hotel per brand standards, maintain financials, appoint staff, and share performance reports with the owner. It also specifies bank accounts, non-
4. Choosing between Franchise and Management Contract - Nov 2016, Hotel ConnectBeni Agrawal
This document discusses the differences between franchise and management contracts for hotel owners. A management contract involves the brand managing both marketing and operations, while a franchise contract only covers marketing and leaves operations in the owner's control. Franchise contracts typically cost half of management contracts in fees, around 3-4% less. However, owners must prove they can professionally operate the hotel themselves to brands under a franchise. The document analyzes the pros and cons of each option and when each may be preferable for different owner needs and capabilities.
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
2015 DHT1113 Topic 4 the lodging industryLaura Law
The lodging industry consists of businesses that provide overnight accommodations, ranging from expensive resort hotels to budget motels. There are over 4 million guest rooms across 60,000 facilities in the US and 13 million rooms worldwide. Hotels can be independently owned or part of a chain, and are classified based on factors like location, size, amenities, and price. Trends influencing the industry include growing leisure travel, alternative accommodations like cruises and timeshares, demand for wellness activities and connectivity, and the impact of online booking and transparent pricing.
This document discusses different concepts for managing hotels, including sole proprietorships, partnerships, franchising, licensing, and management contracts. It provides details on the advantages and disadvantages of each structure. The key concepts covered are sole proprietorships where a single owner controls a hotel, partnerships and joint ventures where multiple parties share ownership and risks, franchising and licensing where brands are licensed to other operators, and management contracts where an external company operates a hotel under contract.
The document discusses employee induction and orientation programs. It explains that orientation is the first step for new employees to familiarize themselves with the work environment, policies, culture and people. The Toyota orientation program is then described in detail over four days, with a focus on communication training, teamwork, problem solving and health and safety. The goal of the program is to socialize new employees and ensure they understand and adopt Toyota's values and mission around quality.
Induction of Labour: SOGC, 2013 WHO, 2011 NICE, 2008Aboubakr Elnashar
This document provides guidelines for the induction of labour. It defines induction of labour and discusses appropriate settings and timing. It outlines indications and contraindications for induction and methods for assessing cervical readiness. Finally, it reviews various methods for cervical ripening and labour induction, including mechanical and pharmacological options like misoprostol and prostaglandins, and their risks and benefits. Monitoring of the mother and fetus during induction is emphasized.
GCC Hotel Management Contracts Survey - February 2015John_Podaras
Review of the main commercial terms for 61 management contracts between owners of hotels in the GCC and international hotel management companies.
Survey carried out in February 2015 by Hotel Development Resources, Dubai with the support and assistance of the office of Al Tamimi & Co.
This document discusses various aspects of contract management for construction projects including methods of work execution, types of contracts, and the tendering process. It describes executing work through amanat (directly by the owner) or through contracts. It outlines various types of contracts like lump sum, unit price, cost reimbursable, design-build, and BOOT/BOT. Finally, it explains the tendering process which involves preparation, tender notice, tender document, conditions of contract, prequalification, evaluation, and selection/award.
Template for new employee induction program - Suitable for all kinds of organ...Anand Mehta
This is an Induction Program Template that is suitable for all kinds of organizations. It allows for customization based on the scale and primary functions within most organizations
Induction of labour is defined as inducing labour after 28 weeks of gestation but before spontaneous onset of labour, with the aim of vaginal delivery. Common indications for induction include post-term pregnancy, hypertensive disorders, diabetes, and premature rupture of membranes. Methods for induction include mechanical methods like laminaria tents, surgical methods like artificial rupture of membranes, and medical methods using prostaglandins or oxytocin drips.
Induction training helps in the integration of newly-hired employees in and across the organization. Let's look at a presentation on "Successful Implementation of Induction Program for New Hires".
This document discusses induction and augmentation of labor. It begins by defining induction of labor as artificially stimulating uterine contractions before the onset of labor, while augmentation refers to stimulating inadequate spontaneous contractions. The document then covers the structures and physiology of the cervix as it relates to ripening. It discusses various methods of assessing cervical status including Bishop's score and indications, contraindications, risks and prerequisites for labor induction. The document provides an overview of common methods used for cervical ripening and labor induction.
The document discusses induction of labour, including its definition, mechanisms, indications, contraindications, methods, and complications. Some key points include:
- Induction of labour is the artificial initiation of labour prior to its spontaneous onset.
- Common methods include membrane sweeping, amniotomy, prostaglandins like misoprostol and dinoprostone, and oxytocin administration.
- Indications include post-term pregnancy, pre-eclampsia, diabetes, and fetal growth restriction. Contraindications include malpresentations and previous uterine scarring.
- Factors like maternal and fetal well-being as well as cervical status via Bishop score are assessed prior to induction.
- Comp
In less than 30 minutes, this Guide to Contract Management clarifies how to manage contracts. Follow practical steps to control contract risk and improve financial performance. The Guide provides specific recommendations about what contract data to track.
Learn about the 5 principles of contract management. These principles elevate contract management from an administrative burden to a vital risk management function.
In this presentation, we will help you understand about franchising, history, types, various advantages and disadvantages of franchising.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
Management services contracts involve one company providing managerial expertise to another for a specific period of time. They allow a company to exploit an international business opportunity without placing all its physical assets at risk. There are two main types of knowledge transferred - specialized technical management knowledge and general business management skills. While they provide opportunities to develop local skills, they also carry risks like nurturing new competitors or endangering managers in unstable locations. An example given is Heathrow Airport Holdings operating airports in the US under long-term contracts.
Effective contract management requires planning throughout the entire contract lifecycle from upstream preparation and downstream execution. Key aspects of successful contract management include establishing clear roles and responsibilities, managing stakeholder expectations, monitoring performance metrics, addressing changes or issues that arise, and conducting a review at contract closure to capture lessons learned. Proper risk assessment and relationship management also help facilitate positive outcomes from contracts.
2. Article - Critical Elements of a Hotel Management Agreement - Apr 2016, Ho...Beni Agrawal
1) Hotel management agreements typically last 10-15 years to allow brands to stabilize revenue during the first 2-3 years when effort is high but revenue is lower. Shorter terms may be taken by new domestic brands looking to quickly scale up.
2) The agreement outlines operator fees such as signing fees, technical service fees, base fees, incentive fees, and marketing fees which usually total 6-8% of gross revenue. It also specifies the obligations of the owner to fund operations and approve annual business plans.
3) The agreement defines the brand's obligations to manage the hotel per brand standards, maintain financials, appoint staff, and share performance reports with the owner. It also specifies bank accounts, non-
4. Choosing between Franchise and Management Contract - Nov 2016, Hotel ConnectBeni Agrawal
This document discusses the differences between franchise and management contracts for hotel owners. A management contract involves the brand managing both marketing and operations, while a franchise contract only covers marketing and leaves operations in the owner's control. Franchise contracts typically cost half of management contracts in fees, around 3-4% less. However, owners must prove they can professionally operate the hotel themselves to brands under a franchise. The document analyzes the pros and cons of each option and when each may be preferable for different owner needs and capabilities.
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
How can a hotel management company help a hotel business_.pdfKritikaDutta4
A hotel management company can provide a wide range of services to help your hotel business succeed. Here are some of the ways a hotel management company can help: https://www.promiller.in/post/how-can-a-hotel-management-company-help-a-hotel-business
2015 DHT1113 Topic 4 the lodging industryLaura Law
The lodging industry consists of businesses that provide overnight accommodations, ranging from expensive resort hotels to budget motels. There are over 4 million guest rooms across 60,000 facilities in the US and 13 million rooms worldwide. Hotels can be independently owned or part of a chain, and are classified based on factors like location, size, amenities, and price. Trends influencing the industry include growing leisure travel, alternative accommodations like cruises and timeshares, demand for wellness activities and connectivity, and the impact of online booking and transparent pricing.
This document discusses different concepts for managing hotels, including sole proprietorships, partnerships, franchising, licensing, and management contracts. It provides details on the advantages and disadvantages of each structure. The key concepts covered are sole proprietorships where a single owner controls a hotel, partnerships and joint ventures where multiple parties share ownership and risks, franchising and licensing where brands are licensed to other operators, and management contracts where an external company operates a hotel under contract.
Hotel franchising allows business owners to operate a hotel property under a hotel brand's name and distribution channels while retaining control of the property. The business owner signs a franchise agreement with the hotel brand to operate under their name in exchange for franchise fees. Franchise agreements tightly control brand standards, terms, assignability, and fees. Choosing the right franchise requires assessing finances, researching brands, matching skills and finances to a brand, submitting a questionnaire, reviewing disclosure documents and agreements, and consulting a lawyer.
hotel asset management, hotel consulting, hotel advisory, hospitality consulting, managing lodging investments, acquisition, financing and disposition of hotels and resorts, hotel and resort management, hospitality advisory, hotel operations, hotel management services
This document discusses hotel asset management. It explains that ownership, management, and branding of hotels are becoming more specialized. Hotel asset managers act on behalf of owners to ensure assets are acquired and managed appropriately. They monitor financial and operational metrics, analyze competitive properties, oversee life cycles and budgets, provide rotation strategies, and supervise management companies and brand franchises. The company's asset management programs cover these six core areas and are tailored to client needs. Their clients include hotel asset owners and financing companies.
Alternaty - Hotel operator selection process - Jan 2013Alternaty
Before considering a management company, developers should be aware of all the possible options and alternatives that match their investment strategy.
Alternaty is a boutique real estate firm providing a suite of consulting services throughout the development lifecycle. We are headquartered in HCMC Vietnam, with associates in Thailand, Myanmar and Indonesia.
Hope to see you at http://blog.alternaty.com/
The document is based on findings from an analysis of over 85 management contracts compiled by TRI, as well as executive level interviews with hospitality professionals. The survey is an update of TRI's 2006 analysis of hotel management contracts covering Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the United Arab Emirates.
Hotel Management Agreement (HMA) – Under such agreement, the Owner appoints an Operator to provide the Hotel with the day-to-day operations management assistance and other incidental services. Read more in this document.
The 2015 Smart Decision Guide to Hospitality Revenue Management [Chapter 1]Starfleet Media
Hospitality Revenue Management involves complex data analysis, demand forecasting, and pricing optimization to maximize hotel profits. It aims to sell rooms at the right price to the right customers. While the concept has existed for decades, it has grown more sophisticated with big data and new technologies. When properly implemented, it can increase hotel revenue by 10% on average through higher occupancy rates and room prices. This guide provides hotel operators a roadmap for evaluating revenue management solutions and partners to improve profits.
The right choice of Revenue Management System
How to generate yields and occupancy.
How to manage group displacement in Hotel Bookings
La scelta del software di Revenue Management
Hospitality management by saffron institute of hotel management SaffronInstituteOfHo
SAFFRON INSTITUTE OF HOTEL MANAGEMENT is one of the Best INSTITUTE IN NORTH DELHI here its education and the atmosphere is world-class .The infrastructure of our INSTITUTE is very spectacular and worth seeing. The atmosphere here is very good. Our children read and get enough success.
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More and more hotels are de-flagging from the brand franchise and becoming independent. Read about the top five reasons why hoteliers are de-flagging in this SlideShare.
The document analyzes the hotel industry using Porter's five competitive forces model. It discusses the industry overview, key metrics like occupancy and average daily room rates. It examines factors like barriers to entry, supplier power, buyer power and competitive rivalry. Hotels can differentiate on location and quality of service. Other income streams include food and beverage, exhibitions, entertainment and commercial areas. Maintaining good differentiation is important to withstand competitive pressures in the industry.
Similar to Dla piper hotel franchising_in_europe_2012 (20)
This document provides an overview of hotel yield management. It defines yield management as using statistical analysis and market segmentation to maximize revenue from a fixed inventory by differentiating prices and accepting or rejecting reservations. Hotels can benefit from yield management by dividing demand into segments, setting different rates, and using tools like forecasting and controls to allocate inventory optimally over time. The document outlines the basic concepts and components of a hotel yield management system.
Bsc performance evaluation in hospitality industry (alfred quintano)João Vilhena
This document discusses performance evaluation in the hospitality industry using the Balanced Scorecard approach. It argues that some dimensions and objectives within the Balanced Scorecard framework may be more important than others at different times, so there is a need to prioritize dimensions and objectives. The document suggests that merging the Balanced Scorecard with the Analytic Hierarchy Process could allow for better prioritization and more effective performance evaluation and management in the hospitality industry.
1 it should be called profit managementJoão Vilhena
Revenue management is a technique used by hotels to optimize profits by adjusting prices based on demand. It aims to sell rooms at the right price, to the right customer, at the right time. Implementing revenue management can increase revenues and profits by 3-6% or even more by focusing all departments on driving total profitability. Revenue management uses historical data and forecasts to determine optimal room rates and inventory levels on different dates. While computer systems help, revenue management requires cultural changes across an organization's departments to be most effective.
Cornell using economic value added (eva) as a barometer of hotel investment p...João Vilhena
This document summarizes a report by Matthew J. Clayton and Crocker H. Liu on using Economic Value Added (EVA) as a metric to evaluate hotel investment performance. EVA represents returns above financing costs and incorporates both risky debt and equity financing costs, unlike traditional measures like cap rates. The authors find that EVA spread peaked in early 2004 during the hotel boom, hovered near zero in 2007 at the peak values, and turned negative in 2008 as values declined, coinciding with economic weakness. A negative EVA spread suggests properties are purchased with expectations of cash flow growth through repositioning. The authors conclude EVA below 1% equivalent to 1% RevPAR growth warrants checking investment viability.
O documento discute os dados do turismo em Lisboa no mês de Abril de 2013. Apresenta três principais pontos: 1) O turismo de cruzeiros em Lisboa teve um recorde de 7 navios em um único dia, trazendo 8,500 turistas; 2) A hotelaria de Lisboa teve desempenho moderado em Abril, com quedas na ocupação e preços; 3) A Grande Lisboa teve desempenho variado entre hotéis, com hotéis de 5 estrelas tendo aumentos na receita.
Manual de gestao de f&b Francisco MoserJoão Vilhena
Este documento apresenta um manual de gestão de alimentação e bebidas. Descreve a caracterização das operações de alimentação e bebidas em hotéis, incluindo um organograma funcional típico com três níveis de responsabilidade. Também discute os desafios atuais da indústria e as principais competências necessárias para a direção com sucesso das operações de alimentação e bebidas em hotéis.
O documento discute a gestão de operações hoteleiras, cobrindo tópicos como alimentos e bebidas, acomodações, planejamento orçamentário, desafios atuais e departamentos auxiliares. Inclui discussões sobre marketing, promoção, controle de vendas e qualidade na área de alimentos e bebidas, bem como gestão de quartos e indicadores de desempenho para acomodações.
O documento certifica que João Carlos Gonçalves Vilhena, portador do documento de identificação No 11489120, possui a qualificação necessária para exercer a função de Diretor Técnico, conforme a Lei No 39/2012 de 28 de agosto. Além disso, o mesmo possui qualificação para exercer a função de Técnico de Exercício Físico.
A Free 200-Page eBook ~ Brain and Mind Exercise.pptxOH TEIK BIN
(A Free eBook comprising 3 Sets of Presentation of a selection of Puzzles, Brain Teasers and Thinking Problems to exercise both the mind and the Right and Left Brain. To help keep the mind and brain fit and healthy. Good for both the young and old alike.
Answers are given for all the puzzles and problems.)
With Metta,
Bro. Oh Teik Bin 🙏🤓🤔🥰
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...TechSoup
Whether you're new to SEO or looking to refine your existing strategies, this webinar will provide you with actionable insights and practical tips to elevate your nonprofit's online presence.
How to Download & Install Module From the Odoo App Store in Odoo 17Celine George
Custom modules offer the flexibility to extend Odoo's capabilities, address unique requirements, and optimize workflows to align seamlessly with your organization's processes. By leveraging custom modules, businesses can unlock greater efficiency, productivity, and innovation, empowering them to stay competitive in today's dynamic market landscape. In this tutorial, we'll guide you step by step on how to easily download and install modules from the Odoo App Store.
How to Manage Reception Report in Odoo 17Celine George
A business may deal with both sales and purchases occasionally. They buy things from vendors and then sell them to their customers. Such dealings can be confusing at times. Because multiple clients may inquire about the same product at the same time, after purchasing those products, customers must be assigned to them. Odoo has a tool called Reception Report that can be used to complete this assignment. By enabling this, a reception report comes automatically after confirming a receipt, from which we can assign products to orders.
CapTechTalks Webinar Slides June 2024 Donovan Wright.pptxCapitolTechU
Slides from a Capitol Technology University webinar held June 20, 2024. The webinar featured Dr. Donovan Wright, presenting on the Department of Defense Digital Transformation.
🔥🔥🔥🔥🔥🔥🔥🔥🔥
إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
💀💀💀💀💀💀💀💀💀💀
تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
6- تحتوي الملزمة في اول سلايد على خارطة تتضمن جميع تفرُعات معلومات الجهاز الهيكلي المذكورة في هذهِ الملزمة
واخيراً هذهِ الملزمة حلالٌ عليكم وإتمنى منكم إن تدعولي بالخير والصحة والعافية فقط
كل التوفيق زملائي وزميلاتي ، زميلكم محمد الذهبي 💊💊
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Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
2. CONTENTS
Introduction 1
Franchise vs Management Agreement 2
Franchising & Disclosure 5
Hybrid Agreements 8
Glossary of Terms for Franchising and Management Agreements 9
About Us 13
3. www.dlapiper.com 1
INTRODUCTION
The majority of hotels operated under a global brand are either owned by the operator,
leased by the operator, run by the owner (or its manager) under a franchise or run
by an operator on behalf of the owner under a management agreement. Many global
operators have pursued asset-light strategies over the past decade, and franchise and
management agreements have thus become the preferred types of contract. This guide
focuses on current trends in hotel franchising.
FRANCHISING
The term ‘franchising’ is commonly
used to describe many forms of
business relationship, the most
common being ‘business format
franchising’, whereby one party (the
franchisor) grants to another (the
franchisee) a licence which entitles
the franchisee to trade under the trade
name and style of the franchisor and
to use the franchisor’s trade marks and
system of operation.
In the hotel industry, franchising
entails the use of an entire package
of services, comprising all of the
elements necessary to establish
the franchisee (hotel owner) as the
operator of a hotel with the same look,
feel, and standards as other hotels
operated by the franchisor or other
franchisees under the same brand.
HOTEL FRANCHISING
IN EUROPE
Europe has a markedly different
hotel market to the US where brand
is king. 70% of hotels in the US
are “branded” and there is a strong,
embedded and regulated franchise
system. Whilst major operators
have strong brand recognition across
Europe, there are also a very large
number of independent and often
family run hotels. In this respect
brand penetration in Europe has
failed to reach US heights, with only
approximately 30% of European
hotels being “branded”.
The principle reason for this is that
Europe is a heterogeneous market
comprising numerous individual
markets, so whilst a brand may be
widely recognised in France, it may
not have the same recognition in the
UK or Poland. European clientele
have generally reserved a preference
for individuality and local traditions
or tastes. Add to this the complex
and varied laws across Europe,
particularly in relation to franchising,
and it becomes easier to understand
the reasons for the lower brand
penetration.
4. 2 Hotel Franchising in Europe
FRANCHISE vs MANAGEMENT AGREEMENT
The key question for owners is
“will my asset benefit from brand
affiliation?” There are significant
benefits of association with a brand,
including a higher likelihood of
success, brand awareness, increased
access to financing and access
to centralised systems. Taking a
franchise is one of the quickest and
most simple methods of achieving this,
whilst allowing the owner to retain
control of its asset.
From the operator’s perspective,
particularly when considering the
current global economic climate,
franchise is very appealing. It offers a
method of quickly expanding a brand,
it is lean and it generates a consistent
revenue stream.
Franchising does, however, leave
open the question of who will operate
the hotel. Most owners will not be
in a position to manage hotel and
thus require the services of a third
party, the non-branded management
company, that will manage the
day-to-day hotel operations. Such
arrangements are now commonplace,
with non-branded management
companies offering major operators
crucial local market knowledge. In
countries where operators are in the
process of establishing their presence
this is vital for early success, and in
certain markets franchising offers
a mutually beneficial partnership
for local non-branded management
companies and established global
operators with a brand to promote.
Theme Franchise Agreement Management Agreement
What is granted? Hotel owner is licenced a package of IPRs, essentially
relating to the “brand” of the hotel operator. These
IPRs are to be used in the management and operation
of the hotel. Centralised marketing, advertising and
reservation services are provided for a further fee
(see below). Management and operation of the hotel
remains the obligation of the owner.
Operator will:
• Manage and operate the hotel on behalf of the owner;
• Provide technical services (eg in relation to the design
and development of the hotel);
• Licence its brand; and
• Provide centralised advertising, marketing and
reservation services.
Clearly under this structure the hotel benefits from the
“hands on” experience of the operator.
What are the owner’s
obligations?
Whilst overall management of the hotel remains with the
owner, the owner is required to:
• Adhere to the operator’s “brand standards manual” in
terms of both the brand and the standards applicable
to that brand;
• Participate in group marketing and advertising;
• Participate in the group’s reservation system; where
the hotel is being constructed or renovated, obtain
the operator’s approval for the relevant plans and
specifications;
• Open the hotel on the specified date (some
operators may require “grand opening event(s)”;
• Prepare and maintain records and accounts to be
shared with the operator; and
• Comply with all legal requirements and provide the
operator/franchisor with protection against any claims.
Although management and operation of the hotel
is provided by the operator, the owner will remain
responsible for:
• Compliance of the hotel with the operator’s brand
standards (and the cost of renovations associated
therewith);
• The cost of maintenance and repairs;
• Insurances;
• The employment of non-management employees;
• In some cases owners will be required to obtain
regulatory licenses for hotel operation, such as liquor
licence etc;
• Real estate issues, such as lease renewals, zoning
requirements, etc;
• Although not an obligation per se, owners will often
seek the right to approve annual budgets, capital and
FF&E budgets, approve key personnel positions, review
the hotel’s accounts, apply performance tests and for a
reasonable restrictive non-compete covenant.
5. www.dlapiper.com 3
Theme Franchise Agreement Management Agreement
What is provided by
the operator ?
The operator will typically provide:
• Training on the operation of the hotel according to
the “system” (some training may be incorporated in
the fees, some may involve additional charges);
• Providing and updating the brand standards
manual(s);
• Occasionally pre-opening services (which may
form part of the fee structure or could be payable
separately);
• Access to the operator’s marketing, advertising and
reservations system; and
• Technical services may be provided on other areas
albeit this is likely to be for additional fees.
The operator will typically:
• Operate the hotel according to the Brand Standards;
• Include the hotel in the operator’s marketing,
advertising and reservations system;
• Have authority to conduct day-to-day operation of
the hotel including purchasing goods and services,
conducting litigation, managing staff etc;
• Provide technical services relating to the design and
development of the hotel (this is often subject to a
separate technical services agreement and fee);
What are the fee
structures?
A typical fee structure involves:
• An initial fee (this is often linked to the size of the
hotel). In some cases this fee is non-refundable;
• Continuing or royalty fees - this is based on room
revenue. Typically this is between 3% and 5% of
room revenue;
• Advertising/ marketing contribution - again
commonly based on room revenue. This fee
generally goes towards a fund for group (not
necessarily local or regional) marketing. Typically
between 2% to 4% of room revenue;
• Reservation fee(s) (can be combined with above)
- supports cost of operator’s reservation and/
or loyalty system(s). Rates and calculation varies
between different operator’s and systems they
operate.
A typical fee structure involves:
• “base fee” - typically between 2% to 4% of gross
revenue;
• “Incentive fee” - typically around 10% of gross
operating profit;
• Technical services fees - lump sum or payable on time
and materials basis for relevant services;
• Centralised services fees - often made up of:
- Marketing fees - typically in the region of 2% of
room revenues;
- Reservation fees - calculated per room or against
room revenue;
- Loyalty and other programmes provided.
Standards applicable Hotel operators commonly have a brand standards
manual or operating manual. Compliance is key.
Brand standards manual. Again compliance is key.
Applicable restrictions Whilst post expiry/ termination restrictive covenants
can be enforceable in a franchise agreement, the
underlying principle is that the restriction must be
reasonable. In the context of an asset run as a hotel
it is difficult to consider a situation where it would be
reasonable to place such a restriction on the hotel/
owner.
HMAs typically contain a restriction on the operation of
similar hotels within a prescribed area.
Personnel As management and operation of the hotel remains
with the owner, the owner will employ all people
associated with the operation of the hotel.
Operator will usually provide key management personnel
(as a cost to the hotel). Most operators will require that
the owner remains the employer of the remainder of
hotel staff.
Franchise vs Management Agreement
6. 4 Hotel Franchising in Europe
Theme Franchise Agreement Management Agreement
Personnel As management and operation of the hotel remains
with the owner, the owner will employ all people
associated with the operation of the hotel.
Operator will usually provide key management personnel
(as a cost to the hotel). Most operators will require that
the owner remains the employer of the remainder of
hotel staff.
Legal requirements Franchising is a regulated activity in a number of
countries and the franchisor or brand owner is
commonly required to disclose detailed information
about the franchise it offers. See overleaf for more
detail in relation to European disclosure requirements.
The HMA is a contractual document that is not
regulated by specific laws, however, local laws will apply
notwithstanding the governing law of the HMA.
Multiple operations Whilst it is common for operators to offer a “direct
franchise” (ie between hotel owner and operator),
franchising also offers the potential for operators
to grant third parties with a “master franchise” or
“development rights” for a specific territory
Term Typically between 5 to 15 years but can be more.
Often includes options to renew.
HMAs are typically between 15 to 25 years and often
incorporate renewal provisions.
From this table you can see that
management agreements generate
more revenue per hotel for the
operator. However, the costs
associated with managing hotels,
particularly on an international
basis, is an awkward fit with the
rationalised, lean model which
currently is preferred.
This said, there are still many
instances when management
agreements are preferable. Flagship
hotels, new and emerging brands
and hotels in emerging markets are
more likely to flourish under the
tighter brand controls offered by a
management agreement.
Franchise vs Management Agreement
7. www.dlapiper.com 5
FRANCHISING & DISCLOSURE
Where a hotel operator seeks to licence
its brand by offering franchises it may
be required to meet certain mandatory
regulatory requirements depending on
the jurisdiction in which the franchise
is to be offered. The US market is
highly regulated, and operators or
franchisors are required to provide
a franchise Disclosure document
(or UFOC) to owners looking to
bring their hotel under the particular
flag. Aside from the US, a number
of countries across the globe have
specific franchise laws (for example,
Australia, Belgium, China, France,
Italy, Malaysia and Spain) but even
in countries where specific franchise
laws do not exist there still may be
a requirement (or good practice) to
disclose information on the franchise
being offered. In jurisdictions where a
Franchisor is a member of a franchise
association, such association may
impose a disclosure obligation on its
members through a non-statutory code
of practice.
Outlined below is a high level
summary of the disclosure obligations
in some key European jurisdictions.
Country
(Regulations)
Belgium
(The Law of 19
December 2005
as modified on 27
December 2005)
• summary of the obligations of the parties (including
consequences of not meeting them);
• description of non-compete clauses and all
exclusive rights granted; grounds available for early
termination;
• summary of the conditions which apply to a
renewal of the franchise.
• details of the franchisor’s identity;
• summary of the nature of the activities of the
franchisor and the IPR rights;
• annual accounts of the last 3 years;
• summary of the historic development of the franchised
network and the number of franchisees;
• description of the investment required to be made by
the franchisee and the period of amortisation;
• a market study.
Czech Republic
(Civil Code)
No specific regulation but again the Civil Code implies a duty of “good faith” and “fair dealing”, meaning that
although disclosure is not a strict legal requirement, it is recommended to disclose key facts to avoid claims of
misrepresentation later in the relationship.
France
(Loi Doubin Law /
Commercial Code)
• term and renewal conditions;
• termination provisions;
• transfer clause and the scope of the exclusivity
granted.
• details regarding the company granting the franchise
and its directors;
• banking references;
• summary of the professional experience of the
managers;
• copy of the accounts for the last two years;
• details of investments and expenses to be borne by
the Franchisee;
• a market study.
Germany
(s.242 German Civil
Code)
No specific requirement but “good faith” obligations
under the Civil Code would make it advisable for early
contract disclosure (or a summary)
All important information and documents relevant to
the franchise relationship should be disclosed within a
reasonable time span prior to the signing of the contract.
For example, relevant IPR, investment requirements;
general information on the brand and associated standards.
Greece
(Civil Code)
There is no specific regulation although the Greek authorities of long discussed implementing specific regulations. As
with other jurisdictions, the Greek Civil Code implies a duty of “good faith” which itself implies a duty on Franchisors
to disclose key facts.
Hungary There is no specific regulation but the Hungarian civil code will apply. Note that Hungarian laws draw heavily on the
German and Austrian legal systems and so again disclosure is recommended.
Disclosure Obligations
Contract Summary Commercial Disclosure
8. 6 Hotel Franchising in Europe
Country
(Regulations)
Italy
(Law Number
129/04)
The law does not require a specific summary. However
the contract must contain details concerning key
elements including:
• the fee and investment expected of the Franchisee;
• the territory granted to the Franchisee; and
• a description of the know-how and services to be
provided by the Franchisor.
• the franchisor’s balance sheets for the three previous
financial years;
• documentation relevant to the franchisor’s trade
marks;
• a list of all the franchisees belonging to franchisor’s
network;
• list of all the franchisees belonging to franchisor’s
network.
Netherlands There is no specific regulation. General contract rules still apply and best practice is to disclose.
Norway There is no specific regulation. General contract rules still apply and best practice is to disclose.
Poland
(Article 56 KC)
No specific regulation but under general principles of civil law Franchisor has a duty to disclose key facts of the
franchise offered.
Portugal There is no specific regulation, however general Portuguese contract law protects Franchisees and therefore best
practice is to disclose material facts on the franchise offered.
Romania
(Government
Ordinance 52/1997)
Contract summary not legally required, however
“full awareness” requirements suggest early contract
disclosure (or a summary).
Romanian regulations provide for general duties of
disclosure on the Franchisor such that the Franchisee is in
“full awareness” of its participation in the relevant franchise.
The regulations also provide for specific requirements in
the context of the Franchise Agreement itself.
Russia There is no specific regulation. General contract rules still apply and best practice is to disclose.
Slovakia
(s.43 of the Civil
Code)
No specific regulation but again the Civil Code implies a duty of “good faith” and “fair dealing”, meaning that
although disclosure is not a strict legal requirement, it is recommended to disclose key facts to avoid claims of
misrepresentation later in the relationship.
Spain
(Law 7/1996 and
Royal Decree
419/2006)
• no specific requirements, must comply with basic
contractual requirements.
• Franchisor’s statutory identification data (filing details,
register number);
• description of the Franchisor’s experience (starting
with the date the Franchisor company was
incorporated and describing the different phases of
the network’s development;
• a general description of the Franchise (system, know-how
and the technical assistance that the Franchisor
will provide);
• proof of ownership of the relevant IPR;
• an estimate of the investment the franchisee will have
to make.
Disclosure Obligations
Contract Summary Commercial Disclosure
Franchising & Disclosure
9. www.dlapiper.com 7
Country
(Regulations)
Sweden
(Disclosure Act 2006)
• information on in term and post term non compete
clauses;
• information on the term, the conditions for
amendment, renewal or termination;
• information on how contractual disputes are to be
resolved.
• description of the franchise;
• information on the fee to be paid by the franchisee;
• information on the categories of goods or services
that the franchisee is required to purchase;
• information regarding the IPR.
Switzerland There is no specific regulation. General contract rules still apply and best practice is to disclose.
Turkey There is no specific regulation. General contract rules still apply and best practice is to disclose.
Ukraine
(Commercial Code/
Civil Code)
• must be a single written document;
• contain summary of the obligations of the parties;
• general contract rules still apply
• There are no specific rules governing the disclosure in
franchise agreements and best practice is to disclose
United Kingdom There is no specific regulation. General contract rules still apply. and best practice is to disclose.
Disclosure Obligations
Contract Summary Commercial Disclosure
Franchising & Disclosure
10. 8 Hotel Franchising in Europe
HYBRID AGREEMENTS
A global “one size fits all” approach to hotel management styles does not work.
Franchising is the mainstay in the US, whilst in Europe there is a broad mix of leasing,
ownership, franchising and management agreements. International operators in China
and other emerging markets currently favour management agreements as they allow
tighter brand control, though recently we have seen experimentation with different
approaches which may or may not become preferable.
“franchise light” or “mini-franchises”
are being offered
in Continental Europe. These
agreements give the owner the benefits
of “system affiliation” associated with
an established brand, but based on
softer branding than that envisaged
under a standard franchise with a
big operator and at considerably less
cost. Whilst this is clearly a reaction
to the current economic climate and
the nature of the European market,
given the compromises that need to be
made on branding it is questionable
how attractive the concept is to major
operators.
“Manchising” is, as the name
suggests, a hybrid form of franchise
and management agreements. The
forms of contract can vary from a
complete combination of both forms
of agreement, to one that is initially
a management agreement but which
after an initial term, say five years,
moves to a franchise relationship.
The rationale behind manchising is
that the operator has greater control
over the operation of a hotel through
their management at the outset of the
relationship, which is not the case
with a “pure” franchise agreement.
This approach has clear advantages for
operators launching new brands and/or
entering new territories.
11. www.dlapiper.com 9
GLOSSARY OF TERMS FOR FRANCHISING
AND MANAGEMENT AGREEMENTS
Area development The exclusive or non exclusive territorial `rights granted to an individual by the
hotel brand owner to exploit that brand and increase the flag’s market penetration in
a particular area or jurisdiction in accordance with a roll out schedule. Therefore,
the “developer” will have two roles: (i) as developer of the brand in the territory;
and (ii) as franchisee of each hotel opened pursuant to the roll out schedule. The
grant of development rights is more common to retail sector franchising than hotel
franchising.
ADR Average daily rate. This is used to measure hotel revenue, and is calculated by
dividing gross room revenue by the number of occupied room nights sold in a
specified time period.
Advertising Fee The Franchisee's contribution to the Franchisor's cost of international/national/
regional advertising and marketing of the whole system. Commonly based on Room
Revenue. This may also include room reservation or loyalty programme fees or this
may be a separate fee payable by Franchisee.
Asset-light strategy The movement by operators away from hotel ownership towards management
structures that include franchising, sale and lease back and, most notably,
management agreements.
BAR Best available rate.
Base Fee or Basic Fee The fee payable by the owner to the operator, usually a percentage of revenue.
Brand Standards The operator’s standards applicable to the use of a hotel’s brand and its associated
marks usually set out in the Manual (in management agreements) and the Operations
Manual (in franchise agreements).
Buying cooperatives Associated with franchises, whereby Franchisees (sometimes with Franchisor input)
establish a member owned and controlled business devoted exclusively to purchasing
and supply chain issues of Franchisees under that flag.
Clustering or complexing A group of hotels in a small area operated by the a single company which share costs
by, for example, sharing staff.
Departmental expenses Expenses specific to one of the three Operated Departments; Rooms, F&B and Other
Operated Departments.
Disclosure documents Documentation describing the franchise being offered, usually including a description
of the brand, the investments required by a Franchisee, the fees and a summary of the
contractual requirements.
EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation. More commonly
referred to as Net Operating Income (NOI).
F&B Food & Beverage.
FF&E Either (1) Furniture, Furnishings and Equipment, or (2) Fixtures, Fittings and
Equipment, such as beds, tables and chairs. These items are accounted for as capital
expenditure, and normally exclude Operating Equipment.
12. 10 Hotel Franchising in Europe
FF&E Reserve A sum of money which is used to fund replacements and additions to FF&E. The
reserve is normally funded by a fixed percentage of revenue each month.
Fixed Charges Under the Uniform System, these charges include rent, property taxes and insurance.
Fractional A generic term for various forms of shared ownership models for residential and
condominium properties.
Franchise Agreement A contract covering the grant of rights by the Franchise Owner to Franchisees.
Franchise disclosure In many jurisdictions across the globe, disclosure of the material components by
a Franchisor of the franchise being offered is a legal requirement. In jurisdictions
without specific franchise laws it is often best practice to disclose this information
or the obligation to disclose may be imposed by the code of practice to which the
Franchisor is a member.
Franchise-light The provision of brand affiliation common to standard franchising but with less
emphasis on branding common to standard franchising and usually at a lower cost.
Franchisee The individual or corporate entity appointed by the Franchisor to run an individual
franchised business.
Franchisor The owner of the hotel brand being franchised.
Global Distribution Systems The electronic reservations network by which travel agents bookings with airlines
and hotels. There are four leading GDS systems - Amadeus, Galileo International,
Sabre and Worldspan.
GOP Gross Operating Profit, calculated as total revenue less operating expenses (including
Departmental Expenses and Undistributed Operating Expenses).
GOPPAR/GOPAR Gross Operating Profit per Available Room.
Gross Rooms Revenue Revenue only from Rooms (i.e. excluding revenue from F&B, Other Operated
Departments and other income).
HMA See Management Agreement.
IBFC Income Before Fixed Charges. Under the Uniform System this is Gross Operating
Profit before management fees.
Incentive fee A fee payable to a hotel operator, usually based on a percentage of profit.
Initial Franchise Fee A Fee payable by Franchisee on execution of the Franchise Agreement associated
with the initial grant of rights and costs incurred by Franchisor.
IMF Incentive Management Fee (see above).
IPR Intellectual property rights, such as trade marks, copyright, patents, design rights,
know-how and other intangible rights that may or may not be capable of registration
(and/.or protection).
IRR Internal Rate of Return. A rate of return used in capital budgeting to measure and
compare the profitability of investments. It is also called the rate of return (ROR).
Glossary of Terms for Franchising and Management Agreements
13. www.dlapiper.com 11
Keys The number of guest rooms in a hotel, measured by the number of keys.
Licence fee A fee for use of a brand name (also known as a Royalty fee) and more common to
franchising.
MAC Material Adverse Change.
Management Agreement An agreement between the hotel's owner and the hotel operator for the operation
of the hotel by the operator on behalf of the owner. Also known and an operating
agreement.
Management Test A mechanism allowing a hotel owner to terminate a Management Agreement due to
poor performance buy the operator, often by benchmarking against similar hotels in
the same market.
Manchise A contract that can take various forms, but is essentially a hybrid of franchising and
management contracting. Common forms include franchise plus outsourcing of
management to a third party operator, a mix of franchise and management over a
defined period and/or totally hybrid relationships.
Manual The manual setting out of an operator’s Brand Standards under a management
agreement. See also “Operations Manual” for franchise agreements. The Manual and
Operations Manual will be similar, however an Operations Manual will likely be
more detailed in relation to operational compliance with the system.
Master franchising Subject to certain terms and conditions, the concept provides the individual with the
right to grant franchises of the franchised business to others within a defined territory.
This is more common in the retail sector.
Mini-franchises See franchise-light.
MLA Mandatory Liquid Assets.
NDA A Non-disturbance agreement made between the hotel's owner, the operator and
the owner's lender. The lender agrees that should the owner default and the lender
forecloses the loan, the lender will keep the management agreement in place. The
lender will usually have the right to step in and cure an owner's default under the
management agreement.
Net Operating Income or Net
Operating Profit (NOI or NOP)
The term used for EBITDA under the Uniform System. It is equal to Gross
Operating Profit less management fees and Fixed Charges.
Non-branded management
companies
A company operating a hotel on behalf of an owner that does not operate under a
recognised brand. It is most and therefore is commonly tied with a franchise.
Operator The hotel management company that manages a hotel under a management
agreement. Under a franchise agreement the operator is the brand owner.
Operating Agreement See Management Agreement.
Operating Budget A budget produced by the operator, containing budgeted revenues, expenses and
capital expenditure for the forthcoming financial year.
Glossary of Terms for Franchising and Management Agreements
14. 12 Hotel Franchising in Europe
Operating Equipment Equipment used in day-to-day operations, such as linen ,china and uniforms. Such
equipment is accounted for as a current expense rather than capital expenditure (see
FF&E).
Operations Manual A manual that provides information to the Franchisee on how to operate a hotel in
compliance with the System and the Brand Standards.
Operated Departments Three categories of classifications of Gross Operating Revenue under the Uniform
System. The categories are Rooms, F&B and Other Operated Departments, which
includes revenue from golf, spas etc.
Operating Plan See Operating Budget.
Occupancy Rate (%) A rate used to measure performance, the occupancy rate measures the number of
hotel nights sold as a percentage of the number of room nights available. The rate
is calculated by dividing the total number of rooms sold by the number of rooms
available.
Owner The owner of a business which, under a management agreement, is counterparty to
an operator. Under a franchise agreement the owner becomes the Franchisee.
PBIT Profit Before Interest and Tax.
PIP Property Improvement Plan, a document setting out the refurbishment required for an
asset to will meet the standard of a particular brand.
Radius Restriction A restriction in a management agreement preventing a hotel chain from owning,
operating and/or franchising another hotel within a specified distance. Other terms
include Restricted Area or Protected area.
Rental and Other Income Revenue from non-Operated Departments, such as space rental.
RevPAR Revenue Per Available Room, a key measurement metric for hotels. It is calculated
by multiplying a hotel's average daily room rate by its occupancy rate.
Rooms Revenue Revenue only from Rooms (i.e. excluding revenue from F&B, other Operated
Departments and Rental and Other Income).
Royalty Fee See Licence Fee.
System A Franchisor's methods, know how and business format for the conduct of the
franchised business. Operational elements of the System are set out in the Manual or
Operations Manual.
Total Revenue Total Revenue from all sources, including Rooms, F&B, Other Operated
Departments, and Rental and Other Incomes.
UFOC Uniform Franchise Offering Circular - a document containing information which
the US Federal Trade Commission requires franchisors to provide to franchisees
before a franchise agreement is signed. In other jurisdictions this is referred to as the
Disclosure Document.
Undistributed Operating
Expenses
Expenses attributable to the whole hotel and not a specific department.
Glossary of Terms for Franchising and Management Agreements
15. www.dlapiper.com 13
DLA Piper is a leading global law firm for the hospitality
and leisure sector.
We are one of the world’s largest law firms, with more
than 75 offices in over 30 countries. We were one of
the first firms to develop a dedicated global Hospitality
and Leisure sector. We have over 200 lawyers with a
proven track record in the sector advising businesses on
a diverse range of issues.
Our knowledge and experience enable us to identify
trends, create solutions and be consummate business
advisors for our clients. We know the sector, the key
players and the business and legal concerns in the
market.
By aligning the breadth and depth of our key practice
areas to the specific needs of the sector, we have
the requisite focus and experience to provide first-class
service to clients in their local and international
investments and operations.
We provide a genuine one-stop-shop for the hospitality
and leisure sector. Every legal skill is available to you,
from acquisitions and franchising to employment and
intellectual property. In short, we are one global team
with no borders, providing a real advantage to you.
FOR MORE INFORMATION
To learn more about DLA Piper, visit
www.dlapiper.com or contact:
Karen Friebe
Global Co-chair and Head of
Hospitality & Leisure Group
EMEA
T +44 (0)20 7796 6155
M +44 (0)7971 142359
karen.friebe@dlapiper.com
Iain Bowler
Head of Franchising, EMEA
T +44 (0)20 7796 6311
M +44 (0)7968 558916
iain.bowler@dlapiper.com
ABOUT US