Hotel & Motel Management - January 19, 2009 - (Page 46)

H&MM January 19, 2009 | HotelMotel.com 46 News & Analysis INDUSTRY COVERAGE “What we bring is existing infrastructure and our mass of 200 properties.” DOUG COLLINS, PRES. AND CEO, ABF America’s Best Franchising takes over Budgetel By Chris Crowell and Jason Q. Freed STAFF EDITORS Atlanta–Mike and R.C. Patel resurrected the Budgetel Inns & Suites franchise in 2007, making it the ﬁrst minority-owned franchise in the U.S. Now, America’s Best Franchising is taking the reins. “It’s always difﬁcult to start a new brand,” said Doug Collins, president and CEO for America’s Best Franchising. “What we bring is existing infrastructure and our mass of 200 properties. We have long-term staying power to build a brand. Mike and R.C. Patel and their ownership group should be applauded for bringing back a great brand.” An initial agreement between ABF and Budgetel Franchise System was made in 2007. ABF began to manage many of the back- ofﬁce franchising issues, including use of its central reservation service, marketing and operations support, orientation and training, and franchise administration. This new agreement, which consists of an initial ﬁve-year term and is followed by three ﬁveyear periods, will bring all Budgetel franchising responsibility to ABF, with the Patels owning the trademark. A spokesman for the Collins Patels said they did not ABF wish to comment on Budgetel. Collins said the key to the deal will be building the Budgetel brand, which ABF is in a position to do because of its track record and infrastructure. Budgetel franchisees will pay Organic growth has slowed with the economy, Gokal said of Vista, but several properties are under construction and several conversions are waiting to join. “We expect a lot of movement over an initial $5,000 fee and then a $20 per month per room franchise fee going forward. Since the licensing deal was announced in November, Budgetel has opened two new properties in Texas and signed agreements with ﬁve other hotels to make the switch, bringing the Budgetel portfolio to seven. The ABF portfolio now includes three upper-economy brands— Budgetel Inns & Suites, Country Hearth Inns & Suites and America’s Best Inn & Suites—and the upscale 3 Palms brand. “We have a very good mix of brands and are always looking for beneﬁts for existing and potential franchisees,” Collins said. ccrowell@questex.com the next few months,” he said. Fifteen properties are in the pipeline. “One of the things we’ve experienced despite the economy, because of what we do and how we do it, [is] some very strong numbers,” Gokal said. “We believe we can bring the same marketing prowess to the Select Inn brand.” “Our sense is the franchisees are excited to have us in play,” Harvel said. “Often when you have people who have not met you, the question is, ‘What are you going to do to us?’ The question should be, ‘What are we going to do for you?’ We expect to show them through performance. In a very short period, we can show Select Inn franchisees a performance they have not experienced.” Short-term changes will include rolling Select Inn franchises into the marketing and reservations programs, he said. Fair franchising is Vista’s core philosophy, and the company will bring that culture to Select Inns, Gokal said. “We want [Settle Inns] to experience our way of operating and we hope our current licensees will transfer to a Vista-like contract, which includes not just the fair franchising but our performance guarantee.” Patel’s Haven Trust Bank seized In December, Georgia-based Haven Trust Bank, which Mike Patel founded, was seized by the state government and the Federal Deposit Insurance Corp., falling victim to the credit crunch and faulty real estate loans. Georgia-based Haven Trust is of the same name as the Florida-based bank but operated as a separate entity. “We, along with all of our board members, are devasted by the closing of Haven Trust Bank, not just for ourselves but for the shareholders as well as for the staff,” Patel said. “We put our heart and soul into the bank, as well as our investment dollars.” Patel opened the Georgia-based Haven Trust Bank in 2000 and it grew substantially, to nearly $600 million in assets, including a fair amount of hospitality lending through Patel’s contacts at the Asian-American Hotel Owners Assn. Citing a lack of liquidity, the bank was closed and the FDIC offered its assets up for sale. A day later, Branch Banking and Trust purchased part of its assets; three days later, four Haven Trust branches opened as BB&T branches. Patel’s two other banks remain in good standing, a spokesman said. jfreed@questex.com Select Inn Continued from page 4 kota and Missouri as areas for growing both brands. Select Inn’s 12 properties, like this one in Minot, N.D., are concentrated in the upper Midwest region. Maintain Brand Standards Cost Efficient On Site with No Downtime Refinishing Reupholstering 10-20 Rooms per Day Professional Finish Armoire Modification Custom Granite & Quartz Clean & Non-toxic Recognized Globally Environmentally Friendly Marie Casper, president of Select Franchising and of Discover Lodging Management, said selling Select Inn, which her company acquired ﬁve years ago, allows it to concentrate on the hotel management business. Discover Management manages 11 hotels, including a Select Inn. “We know all our franchisees will beneﬁt from the strength in numbers,” Casper said. “I like that they are focused on fair franchising; and as a franchisee, from what I’m seeing in the franchise arena, that’s not always the case. They look at their franchisees as their customers.” Advantis’ Internet marketing initiative also will bring franchisees additional revenue, she said. Moving forward For the next acquisition, Gokal said he would like to ﬁnd a brand that can be used as conversion properties for the Vista and Select Inn brands. He said there isn’t an upscale brand that the company is in a position to acquire, but added, “One should never say never.” Although he still is looking for acquisitions, Gokal wants to move wisely. “We want to be successful in our current acquisitions and not get stuck in acquisition mode without being able to digest what we’ve acquired,” he said. “Our structure allows us to acquire Select Inn with ease and we could acquire a couple more Select Inn-size companies with ease.” hgunter@questex.com CIRCLE NO. 126 SELECT INN http://www.HotelMotel.com http://www.therefinishingtouch.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - January 19, 2009

Hotel & Motel Management - January 19, 2009 Contents Select Inn First in Vista's Buying Plans Danzinger Chosen for Round 2 at Wyndham Perspective Energy Star Update Legally Speaking Consultant's Corner Sales Clinic Travel Trends Franchise Law Family Business Cornell Insights HotelWorld Update Transactions Careful Marketing is Key for Timeshare Debt Market Slow for Most Transactions Trends & Stats Proper Mix of Uses Leads to Profitable Partnerships Card Check, Employee Retention Big Issues for CEOs Locking Systems Televisions Fitness Centers/Spas Mattresses Ad/Editorial Index Marketplace Checking Out

Hotel & Motel Management - January 19, 2009

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