The following is a quick review of the basic pros and cons of buying a hotel franchise. Every investor is different. Depending on who you are, certain “advantages” may indeed be “disadvantages” and vice versa. Consider that this is your starting point for evaluating hotel franchise opportunities.
Starting with good things, let’s look at the advantages:
Reduce startup risk -You are working with the person who successfully completed this operation.
Turnkey operation -Similarly, there is no need to reinvent processes, procedures or procurement. Your franchisee has established the system.
Standardized system -Back-end accounting, IT and financial systems are in place, so you don’t need to spend time implementing a reservation system.
Purchasing power -As part of a larger part, you can get the benefits of bulk purchases.
Consultation is always available -Experience is important, your franchisee is nearby. Seek as much help as possible.
Marketing -Brand image and marketing already exist. You are not looking for a one-time travel reviewer to highlight your name.
Financial support -Some franchisees are willing to help you fund these high capital projects.
You are your own boss -The glory of that is self-evident!
Now let us look at the disadvantages:
Less freedom -You are married to the franchiser-for better or worse!
Royalties -As a franchisee, you need to pay the above support fees.
Cost -Hotels are companies with high capital and operating costs.
Lack of support -If your franchiser cannot help as you wish, you may feel at a loss.
Inflexible system -Even if you have a better way to manage bookings, use their method.
Unbalanced contract -All franchise contracts (not limited to hotels) tend to be franchisees.
Depends on franchisor -Their performance is your performance.
These are all things you should consider when deciding to buy a franchise or hotel business.