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Selecting a franchisor

The selection of a franchisor to improve the profitability of a hotel is a difficult case to solve. Operating conditions, the definition of the key points of the contract and its implementation are essential aspects for a successful operation. Moreover, for the hotel owner,a franchise agreement is something that carries a strong emotional load. Initially it is customary to adopt the idea that franchisingmeans somehow a loss of possession of the hotel, and this feeling extends sometimes to the management team. It happens often that among partners, directors, employees and relatives, false objections and feelings of rejection arise.

Economically, the cost of the franchise is somewhat sure, while the benefit of it is perceived as a "maybe". Therefore, in these cases it is important the mission of BurgMaster Hospitality Consultants, focused on the what and the how to obtain, from the selection of the most suitable franchisor, a synergistic relationship between the parties.

In the case that we present the hotel subject to a possible franchise was owned by a business group diversified and important, both for its industrial activity and its real estate holdings.

The group's management was concerned about the results of one of its resort hotels located on the Costa Dorada. The hotelnot belonging to the more usual format in the group, was subject to strong competition in the area. RevPAR was only 30 € and had serious difficulties in achieving a positive GOP.

BurgMaster, once the hotel studied, selected the franchisors that a priori seemed more suitable and, according to the property, negotiations with each of them began. Leading variables were determining the costs of adaptation to the brand (adjusted and achievable in three years), the powerful booking engine of the franchiser and the drastic reduction in the cost of marketing through online agencies. After two years of operation of the franchise, the forecasts made had been fulfilled satisfactorily by both parties, reaching from the first time operating a positive GOP and, of course, property and his team continue to manage the hotel enjoying an excellent collaborator: the franchiser brand.

Burgmaster Hospitality Consultants

Comte Borrell, 340, pral 1ª
(Plaça Francesc Macià)
08029 Barcelona
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+34 686 505 450

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Technical seminars

Valuation Day.
Hotel establishment valuation: Theory, practice and real cases.
Transformation Day.
Transformation of non-hotel buildings into hotels (and vice versa): A mathematical model.

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