Have We Reached Hotel Franchising Détente?

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They may not yet be ready to exchange gifts on holidays, but it looks as though Choice Hotels and the Asian American Hotel Owners Association have patched up their differences that nearly got the mega-franchisor booted out of the influential 10,000-plus-member hotel owners' organization. In a letter sent late last month to Choice President & CEO Steve Joyce, AAHOA leadership outlined a list of changes Choice has promised to make that will qualify the company to renew its AAHOA membership.

Most of the items were fairly basic and involve Choice's impact policy. A few other things on the list, while important, aren't earthshaking. In one bullet point in the agreement, Choice agreed to commission a study to address the mission and structure of its owners' council. Part of that discussion will be whether to refocus the council as a completely independent group, similar to the IHG Owners Association.

Last September, the AAHOA board sent a letter to Choice telling the company it needed to change its attitudes and practices toward its franchises or face rejection of its membership renewal for 2012. Those membership privileges include access to the AAHOA annual and regional conventions, events where thousands of current and, more importantly, potential franchisees attend.

The rift between the two groups and its relatively swift (four months to the day) resolution may mean a growing détente between the big franchise companies and their owners. My friend and franchisee advocate Stan Turkel disagreed with me last fall when I commented that the Choice-AAHOA disagreement wouldn't escalate into full-fledged warfare. I seem to be right this time. AAHOA had a problem with Choice's conduct, and it made its feelings known in a direct and consequential way. And, by all appearances, the two sides were able to sit down, hammer out their differences and agree on a course of action. For a change, there was no PR campaign in the press or inflammatory remarks made on the stages of various industry conferences to make the situation worse.

I hope I'm right. An adversarial relationship between franchisors and franchisees (and their AAHOA proxies) is a healthy thing. It's not healthy, however, when either side strays from the key issues and resorts to grandstanding.

I congratulate both Choice and AAHOA for taking the high road to solving their differences this time.

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