Don Sniegowski at Blue MauMau reports that in a turn of events, angry franchisees are terminating a franchisor. The Asian American Hotel Owners Association has informed Choice Hotels that the nefarious franchisor will be stripped of its membership unless long outstanding grievances from franchisees can be resolved within the next 90 days.

“Our AAHOA Board has decided that it would be best to go our separate ways and not renew Choice’s membership for 2012.”

In a letter addressed to Choice’s chairman Steve Bainum and the board of directors, the board of the Asian American Hotel Owners Association (AAHOA) stated that there were a number of “egregious and unfair policies and practices” that violated principles of good faith and fair dealing with Choice’s franchisees.  AAHOA’s board wrote, “Our AAHOA Board has decided that it would be best to go our separate ways and not renew Choice’s membership for 2012.  This means that AAHOA would not accept any membership, sponsorship or related funds from Choice, and would not invite or authorize your Choice representatives to appear on any panels, exhibit at our Trade Shows, or otherwise have access to our AAHOA members through our Annual Convention, Regionals (Conferences) or any other AAHOA-related events or periodicals, including advertising in our AAHOA Lodging Business magazine.”

Choice noncompliant with fair franchising

Hotel analyst and consultant Stanley Turkel observes, “It’s about time that AAHOA finally spoke the truth regarding Choice’s anti-franchisee policies. It has been clear to me for a long time that Choice failed the ‘fair franchising’ test.”

Franchisees say that one of the biggest issues is a one-sided franchise agreement that allows Choice, for example, to arbitrarily encroach on the territories of hotel owners, placing new hotels next to existing franchises with impunity. Franchisees also say that Choice Hotels discriminates against Asian Indian franchisees and AAHOA members from participating in leadership positions.

The association is giving Choice Hotels 90 days to cure its franchising problems. “In light of these significant concerns, we request an opportunity to meet with you,” AAHOA’s letter to Choice’s board concludes.

Read more at: BlueMauMau