"By acquiring the controlling interest in Flag Choice Hotels, we will be able to implement a comprehensive business plan designed to improve franchise services, enhance marketing programs, and build a strong base for the Choice brands in the Pacific," said Charles A. Ledsinger, Jr., president and chief executive officer. 

Under the terms of the agreement with Flag International Ltd., Choice has acquired a 55% controlling interest in Flag Choice Hotels (FCH) and was granted an option to purchase the remaining 45% over a five year period from closing. Assuming the option is exercised, the total consideration for the transaction will be US$3.5 million. 

FCH currently franchises approximately 400 properties in Australia and New Zealand under the Flag, Comfort, Quality, and Clarion brands and is the largest hospitality franchisor in those countries. Concurrently with completion of the transaction, more than half of the Flag branded properties in Australia will convert to the Choice brands. As a result of the transaction, Choice will integrate FCH's Melbourne call center to its worldwide reservations network. 

Choice Hotels International franchises more than 5,000 hotels open or under development worldwide under the Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites brands. 

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law.