There is an old saying in Arkansas that comes in the form of a question. � What do the two words �Divorce� and �Tornado� have in common�? The answer is: �Somebody is going to lose a trailer.� Or, in the hotel industry when referenced is made to an Impact Study, �Somebody is going to lose a Hotel�. In the franchiser case, revenue stream. It really becomes a �Win-Lose� situation, and somebody is going to lose. But what if both the Franchiser and the Franchisee left a meeting agreeing that the new applicant would benefit both? 

In researching the effects of Impact and trying to find articles and information on impact policies, the research shows that there is a great deal of information taken for granted or is of little use to both sides. 

Economically, it is necessary for the �Brand� to grow, but not at the cost of either side. Responsible growth should not cause any financial catastrophe for the franchisee. 

It appears that very little has been written about the subject. There have been some good articles that have been published and I would recommend reading the articles and calling or e-mailing the author to discuss your opportunity. They have a great deal to offer you. 

Changes made in Impact policies recently made by the franchisers have so many caveats written in them that it makes it impossible for the franchisee to leave the system without being sued for liquidated damages. These changes are not retroactive to the franchisees that have signed a franchise agreement before the new policies were written and enacted. 

Many of the articles reviewed are directed at the Franchisers to come up with a solution to the Impact problem without the involvement of the franchise community. This will never produce results necessary for the �Brand� to become successful. Impact continues to be a problem plaguing the Hotel Industry and to date has only produced mistrust, bitter feelings, and law suites. 

What is noticeable is that more and more consultants are getting out of the Impact study business as a result of the amount of law suites being filed and the realization that nobody really comes out ahead when the study is completed. 

The current process franchisers use to arbitrarily sue franchisees for liquidated damages as well as the formula used for paying the consultant is still a mystery and causes bitterness and fear in the franchisee community. 

There are an overwhelming number of franchisees that lose from Impact studies as a result of rules, egos, and regulations established by the franchise community. There continues to be a lack of any movement towards creating an Impact report that uses a research technique that is ideal for calculating loss of business and determining financial damages. Applications are still being granted at the expense of existing franchisees. Was your franchise granted at the expense of another? 

Where did the arbitrary three occupancy points impact on occupancy come from? Why hasn't this been changed or completely eliminated? 

Listed are recommendations that will assist both the Franchisee and the Franchiser. It will enable both parties to consider all sides of the issue and hopefully lead to a positive solution of the problem. Ultimately, this will eliminate the necessity and simplification of all Impact Policies. 

Recommendations that Affect a Positive Change for Both Sides

If you receive a written notification advising you of the decision to go forward with a proposed new franchise within your market area, write them back and advise them that you object and express your concerns for future financial losses for your hotel. State in your letter that you are opposing the new applicant due to anticipated Impact and the financial disaster that you anticipate if this applicant is allowed to proceed. You should also state in the letter that you would identify your areas of concern in later correspondence and encourage that both sides should arrive and work out an amicable resolution. Also be aware of the latest ploy of franchisers to ad a tag line �Inn and Suites�. It�s still the same surname. 

Trojan Horse 

Impact is the major areas of change that still needs to take place in the franchise community. Currently the franchiser community has established a procedure for contracting an Impact consultant from a list of consultants the franchiser puts together. This has the appearance of a �Trojan Horse� approach. The consultants who want this work are given to you by the �Opposing Side�, the franchiser. I do not think that you would allow the opposing baseball team to volunteer their pitcher to pitch for your team? Let�s eliminate the need for this procedure! 

Remain Professional 

Above all remain professional and polite and request his/her help and involvement. Be reasonable and talk with other franchisees, your contacts in the industry, and get an outside opinion from a neutral associate who might have had this problem in the past. This should save you time and money. There are going to be situations where your emotions are going to take precedence over business sense. 

Let�s go To Work 

Immediately call the Brand President and discuss the issue with the Chief Operating Officer. He works with a franchise committee, which is usually made up of five to six people that include, but not limited to, the senior franchise sales officer, the brand vice president of marketing, the senior operations officer, and others whose department will be affected when providing service to the franchisee. If need be, call all of them and discuss your problem with them and ask for their advice. The President is already aware of the decision to review a new application, but nobody ever calls them and discusses their point of view and enlists their help. 

Know the facts 

If you do not have a copy of the Franchise Impact policy statement, get one! Also be aware that the policies may have changed after you signed a license agreement. When was the last time you checked this? 

Write another letter confirming the conversation you had with the Brand President and ask for the person assigned to help you and provide you with the following information. (At this point I think the President will pass along this responsibility, hopefully not!) 

Ask for all of the available reports (monthly and YTD) that the Franchiser has produced for your hotel. These include but not limited to sales, marketing, reservations, quality assurance, GDS, Smith Travel Research reports, etc. 

Request (in total) the monthly franchise sales reports. These reports will identify the number of reservations and room nights received from the franchiser by market. 

Denial reports are also very important. They contain a tremendous amount of information. 

Ask for the initial sales reports by the salesperson that is working to sell a new applicant. 

Obtain copies of all the fields service reports if you have worked with them and utilized these great services. I am sure that the names of the reports are different for every Brand, so describe the reports you are requesting. When you receive this information, compare it to yours. You need to review what the Franchiser is using to make their decisions this will enable you to have more insight as to why the Franchiser is making their decisions. 

Call Smith Travel Research and speak to a representative about producing area reports that shows the actual sales trends for a particular geographical area. 

Always ask for reports that you did not mention that the franchiser used to arrive at a decision to move forward with a new applicant. 

A number of the reports mentioned you probably already receive, but the decision to move forward should not be based on YOUR reports. So, why should you use your reports as other consultants have recommended? 

Request a Meeting 

It�s time now to set up a meeting to discuss the perceived issues that are objectionable with members of the franchiser. These members make the decisions to grant or deny franchise applications. This committee should also have a member of the Franchise Advisory Counsel on it. This method of dialogue should eliminate completely any mistrust or misunderstanding and create an atmosphere of teamwork to understand each other. The outcome of this meeting will determine mutually the next step to be taken by both parties. Hopefully it will resolve in a �Win-Win� solution. 

Conclusion

It is at this point that I recommend to all Franchisers to change their Impact Policy Statement to include this feature and eliminate the �recommended� consultant list or any �in your face� approach to expanding the Brand. 

The real strength of any Brand will be the commitment to the franchisee and the franchisee commitment to the Brand. 

Everything I have reviewed has never invited both sides to work together to find a solution. They only suggest ways to prepare and litigate new liquidated damage formulas. They also analyze impact studies, and determine what to look for and how to convey your point of view. All of this is self-graduating and will lead to a �Win-Lose� approach to the problem. 

The Impact Policy for all franchisers is � We will work with you and make a positive change that will promote and improve profit for both the franchisee and your Brand�. 

Remember that if you keep on doing what you always have done, you will always get what you already got! 

It�s time for everyone to keep their trailer! 
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