During the quarter, U.S. Franchise Systems executed 76 franchise agreements including 40 Microtel, 23 Hawthorn and 13 Best agreements.  USFS franchises Microtel Inn & Suites, the chain of all newly-constructed, budget hotels, Hawthorn, the predominantly upscale extended-stay chain, and Best Inns & Suites, the economy / mid-priced chain.

Thirty-eighty properties broke ground or began the conversion process during the quarter, including 12 Microtels, 10 Hawthorns and 16 Bests, while 33 properties opened, including 13 Microtels, 10 Hawthorns and 10 Bests.  The Company ended the first quarter of 2000 with a systemwide total of 425 hotels open and 124 under construction.  This includes 190 Microtels, 110 Hawthorns and 125 Best properties open, and 56 Microtels, 40 Hawthorns and 28 Bests under construction.  

Commented Mike Leven, president and chief executive officer, �We�re proud of our quarterly results for franchise sales, especially in a difficult hotel environment, and also of the performance of our open hotels, which continue to ramp up well.  In fact, as of March 31, the average quality score systemwide was 480 out of 500.�  Microtel hotels achieved an average 481 out of 500; Hawthorn hotels a 483, and Best hotels a 474.  

For the first quarter of 2000 for Microtel Inn & Suites properties open one year or more, RevPar increased from $21.64 to $22.54 or 4.2%; occupancy increased from 51.9% to 52.7% or 1.5%, and average daily rate increased from $41.70 to $42.80 or 2.6%, compared to the first quarter of 1999. 

A greater awareness of the Hawthorn brand was also seen as RevPar for properties open one year or more increased from $50.63 to $53.99 or 6.6%; occupancy rate increased from 59.7% to 64.3% or 7.7%, and average daily rate declined from $84.88 to $84.00 or 0.1%, during the first quarter of 2000 compared with the same period last year.  

For Best Inns & Suites properties open one year or more, RevPar increased from $27.94 to $28.96 or 3.6%; occupancy rate declined from 58.1% to 54.4% or 6.5%, and average daily rate increased from $48.06 to $53.25 or a strong 10.8%, compared to the first quarter of 1999. 

Additional quarterly highlights included the opening of Microtel�s second international hotel in Buenos Aires, Argentina; Hawthorn openings in such high-profile markets as Albuquerque, N.M., Nashville and Memphis, Tenn., and Best openings in Orlando, Fla., and Laguna Beach and Redwood City, Calif. 

Atlanta-based U.S. Franchise Systems was formed in 1995 by Mike Leven, a 40-year veteran of the lodging industry, and Neal Aronson, a former principal of Odyssey Partners, a New York investment firm. 

Certain of the above statements are forward looking statements that involve risks and uncertainties.