ATLANTA - U.S. Franchise Systems Inc. (USFS) has appointed a new president to give CEO and chairman Mike Leven more time to focus on the company's expansion plans.
Leven, who was president of the company since its inception in 1995, passes the reins to Steven Romaniello, who was formerly executive vice president for franchise sales, operations and administration at the Atlanta-based hotel franchise company.
The move follows the-based Pritzker family's agreement in early June to invest $75 million in USFS, a partnership designed to help USFS pursue a more aggressive growth strategy, including the acquisition of new brands. "With the changing scenario of our company and the expectations of our new partners, we will be looking to acquire and to expand our franchise base," says Leven. "I want to spend a heck of a lot more time doing this. It's time for me to be more of a chief executive officer."
Romaniello will handle the day-to-day business that formerly occupied much of Leven's time. "The thought behind it was that I would take some of those duties from Mike Leven so he could focus on those issues that are of strategic relevance to the company," says Romaniello.
As the company's president and COO, Romaniello will head up franchise operations, sales, franchise support and quality assurance, administration, human resources and purchasing. The COO post is a new position at USFS. Romaniello signed a seven-year contract, and Leven agreed to a five-year.
The deal with the Pritzker family, which owns Hyatt Corp. and Hyatt International Corp., is expected to close in November following a shareholder vote. Due to federal regulations, USFS cannot pursue acquisitions until the deal is complete, Leven notes.
Under the agreement, USFS will self-tender 8.66 million shares of common stock at $7.50 per share. In exchange for the $75 million, Pritzker will receive $65 million of 8.5% redeemable preferred stock and $10 million of redeemable convertible/exchangeable preferred stock. Upon completion of the transaction, Pritzker, Leven and Romaniello will control a majority of the voting power in the company.
Romaniello, along with Leven, was one of the 12 employees who started USFS in 1995. The company, which franchises Microtel Inns & Suites, Hawthorn Suites and Best Inns & Suites, started with 22 hotels and now has 464 franchises. An additional 166 are under construction.
Before arriving at USFS, Romaniello served as a vice president for Atlanta-based Holiday Inn Worldwide. He was responsible for franchise sales in the United States, Canada and the Caribbean, as well as for franchise services, support and training for 1,700 hotels in the region operating under the Holiday Inn and Crowne Plaza brands. From 1988 to 1991, he held various positions with Parsippany, N.J.-based Days Inn of America, including vice president of franchise sales.