With the recent slump in the economy, many entrepreneurs are weighing their options very carefully before jumping into a new investment or business opportunity, yet the fact that many are choosing to wait to see what happens to the economy could give the prospective business owner a jump on the competition and the kick-start needed to overcome the struggling economy. One such industry with great potential is hotel and motel franchises. These high capital franchises take quite a bit more to get going than the average small business but the payoff can be exponentially higher and if you follow some of the following tips, you'll be on your way to starting your new hotel or motel franchise in no time.
1) Stay in the Hotels You're Looking at
If you're in the market to start a hotel, chances are you have some experience with the hospitality industry and you're at least beginning to become acquainted with the franchisor you're interested in. But knowing how a hotel or motel franchise is supposed to run is far different than knowing what a specific hotel's daily practices actually look like, so one of the best things you can do is study the business from a guest's point of view. If you're curious about Hawthorne Suites, get a room for a week at one of their locations and do some first-hand research. You'll learn more than a pamphlet can ever teach.
2) Talk to Other Franchisees
This is a good step for someone starting a franchise in any industry. Your interest, as a potential Choice Hotels franchisee for example, is not only in how the business treats its guests, but also it's franchisees, and the only way to learn that is to go and talk with men and women who have already walked that road. Find some nearby franchises and ask to talk to the owners. Ask them about what they like and would like to change about the way their franchisor relates to them, how the purchase process went, and what kinds of ongoing support the franchisor still provides.
3) Seek Wise Council Early in Negotiations
Experts recommend that a new franchisee never even begin to make high capital franchise deals without finding wise advisors to help influence the decision-making process. There is no shame in getting the help of a whole team of seasoned businesspeople to help you navigate the negotiation process with your franchisor, and if you can do so before the deal term sheet is printed by your franchisor, you'll have a lot more leverage in the long run.
4) Negotiate Anything and Everything
The most important thing to know when you go to the table with a franchisor is that you are not at their mercy; the two of you are making a mutual agreement, and the agreement needs to be agreeable to both parties. Whatever you have a problem or concern with in the agreement, as it is drawn up, tell the franchisor what it is and what you want. When you're looking to get into a Wingate by Wyndham franchise, it is as much in their interest that they accommodate you as it is in yours that you accommodate them - and they have more leeway than they let on.
5) When Converting an Old Hotel, Inspect it
It's a really straightforward recommendation, but if you're remodeling an old hotel instead of building a new one, be sure to get every nook and cranny inspected. The last thing any franchisee wants is to spend the money for the perfect business only to find that there are structural, sewage, or electrical problems with the facility halfway through the opening year. Save yourself future headaches by being sure the real estate investment is sound.
6) Research the Local Competition
When it comes to choosing the placement of the hotel franchise you're going to buy, it's important to know all you can about the area you're looking at, and competition is a big part of that.
7) Do Your Homework on Local Development
Chances are good that a franchisor is already well aware of what's going on in any area in which they're proposing to start a franchise hotel, however, doing your own research can never hurt. For that reason, when looking at a potential location for your business, make a call to the local government agencies in charge of land development and road construction. See what future plans are in store for the highways and roads of the area, whether there will be more access to your location or less, and ask about what the outlook for residential, commercial, and industrial expansion is. Make sure that in a few years, the location will be even more hospitable to your business than it is now.
Hospitality is an excellent industry that has been with us for millennia and has proven profitable for millions, so starting hotel franchises is certainly a good idea. Like all things, though, it just has to be done correctly, and the earlier in the process that a franchisee starts doing things the right way, the better. These helpful tips may not make everything run perfectly, but they can provide a good start and the confidence that a new business owner needs to succeed.