Do You Know About O8A? Do Hotel Franchisees Need Independent
Associations? The Best Franchise Advisory Councils
|By Stanley Turkel, MHS, ISHC
1. Do You Know About O8A?- A group of Super 8 hotel owners recently organized and formed the Owners 8 Association (O8A) which is the only independent association of Wyndham Hotel Group franchisees. The Association currently consists of over 1,276 members who have joined together to create a more unified voice to represent their concerns with the franchisor. During the past year, O8A has played an integral role in bringing many positive changes for franchisees, O8A continues to try to forge new relationships with Wyndham Hotels officials to create a better working environment.
Currently, because of O8A’s efforts, an important decision by Eric Danziger, President, Wyndham Hotels Group stopped automatic enrollment into the Wyndham Rewards Program. O8A considers this action to be a significant victory which will result in immediate savings for franchisees. For more information regarding O8A, visit their website at www.O8A.org or call Jay Patel at 336-998-9116.
2. Do Hotel Franchisees Need Independent Associations? In the volatile world of franchisor/franchisee relations, reconciliation often seems hopeless because the franchisor usually has the upper hand. Even the modest proposals embodied in the AAHOA 12 Points of Fair Franchising are seen as revolutionary and radical.
At the center of the dialogue between franchisors and franchisees are the sometimes invisible franchise advisory councils (FACs). These organizations are created and subsidized by franchisors with the idea of fostering and controlling communication and franchisee participation.
As the name indicates, FACs are usually purely advisory and their bylaws determine issues the franchisor will address. The franchisor usually shapes meeting agendas and appoints the franchisee members who serve on the FAC.
Franchisors, of course, claim that the FACs are a progressive force in promoting good relations and cooperation with franchisees, some of whom are likely to define them as little more than window dressing. FACs can be an inexpensive mediation tool to solve conflicts in the entire system, because they enable the franchisee, who has hands-on experience, to be able to filter information back to the franchisor. According to some industry observers, those tools can get tarnished pretty quickly, especially if the creation of an advisory council is nothing more than an extension of the franchisor’s power in a polite “Rubber Stamping” process.
It has come to my attention that over the past ten years significant improvements in franchise systems were due to one major factor: the formation of independent franchisee owner associations. In 1992 in all U.S. industries, there were fewer than 30 independent associations; by 2007 about 300 such groups had formed. In the past, franchisors turned their backs on these associations, claiming their own franchise advisory councils were sufficient outlets for complaints.
But, as corporate attitudes hardened, Dairy Queen, Burger King, KFC, 7-Eleven, GNC, Subway, Dunkin Donuts, Quiznos, UPS Stores, among other franchisees, have formed independent associations.
In hotel franchising there are three independent franchisee associations:
1. International Association of Holiday Inns (IAHI)- created by Kemmons Wilson in 1956, it claims to be an independent association. Despite its good works and its valuable voice, it nevertheless does not meet the test of a completely independent franchise owners association. For example:
2. Choice Hotel Owners Council (CHOC) formed in 1967 to create a unified voice for owners of Comfort Inn, Comfort Suites, Clarion, MainStay Suites, Quality and Sleep Hotels. The mission of CHOC is to represent the Licensees of the Company through a unified voice, protecting the greater interest of its members by providing ideas, advocacy programs and services. The country is divided into thirteen regions, with a Regional Director elected from each Region to represent its Licensees. Every year CHOC holds an annual conference to review Choice policies and to criticize how Choice Hotels International conducts business with its franchisees. This annual Owners’s Summit is a perfect place for Choice owners to express their frustrations, blow off steam, and to make recommendations to bring the Choice franchise agreement in closer alliance with AAHOAs 12 Points of Fair Franchising, CHOC’s Summit works well as a relief value to give voice to franchisee frustrations. But unfortunately, since Choice pays many of the expenses, the ultimate outcome of the Summit is predictable with only minor improvements in the franchise agreement. The CHOC FAC is mostly advisory with no real power to negotiate as an equal partner but, as I observed first hand as a featured speaker in 2007 and 2008 it provides a good forum to raise major issues for negotiation with Choice management.
My recommendations to all the other hotel franchise advisory councils:
“In a democracy dissent is an act of faith. Like medicine, the
test of its value is not in its taste, but its effects.”
Stanley Turkel, MHS, ISHC operates his hotel consulting office as a sole practitioner specializing in franchising issues, asset management and litigation support services. Turkel’s clients are hotel owners and franchisees, investors and lending institutions. Turkel serves on the Board of Advisors and lectures at the NYU Tisch Center for Hospitality, Tourism and Sports Management. He is a member of the prestigious International Society of Hospitality Consultants. His provocative articles on various hotels subjects have been published in the Cornell Quarterly, Lodging Hospitality, Hotel Interactive, Hotel-Online, AAHOA Lodging Business, etc. Don’t hesitate to call 917-628-8549 or email firstname.lastname@example.org.
Stanley Turkel, MHS, ISHC
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