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Nobody Asked Me, But… No. 62
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Do the Radisson Franchisees Agree with Carlson's billion-dollar
Makeover Program? At Last: A Win-Win Victory for Tourism; 
Congratulations to the Harris Rosen Foundation

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By Stanley Turkel, MHS, ISHC
March 12,  2009

Do the Radisson Franchisees Agree?; At Last: A Win-Win Victory for Tourism; Congratulations to the Harris Rosen Foundation; Judge Grants Summary Judgment to Super 8 Franchisees; Quote of the Month

1.  Do the Radisson Franchisees Agree?

Carlson Hotels Worldwide recently unveiled their five-year program to separate the Radisson brand into two distinct products: Radisson Blu which will fit into the upper-upscale segment and Radisson Green, which will fit into the upscale segment.  This Radisson makeover is part of a billion-dollar program, a centerpiece of Carlson’s so-called “Ambition 2015” campaign- a program designed to expand Carlson’s global portfolio by at least 50% to more than 1500 hotels by 2015.

Since 93% of the Radisson properties in North America are franchised and 7% are managed or owned, more than $900 million of the required $1 billion for this proposed program must come from Carlson franchise owners.  I looked but could not find any agreement from the Radisson Franchise Advisory Council to budget and expend $900 million in the next five years.  Is there any franchisee agreement on this blue-sky program?

In a study performed in September 2008, I measured the Performance Appraisal Reports prepared by the Asian America Hotel Owners Association (AAHOA).  My purpose was to quantify the relative compliance of five franchise companies (Accor, Carlson, Choice, La Quinta and Wyndham) with AAHOAs 12 Points of Fair Franchising.  Since Carlson finished last at 34.3% compliance, I wonder how they expect to expand without improving the factors that are of greatest importance to franchisees: territorial protection, termination and windows provisions, liquidated damages, choice of venue, dispute resolution, vendor exclusivity, minimum performance, etc.

2.  At Last: A Win-Win Victory for Tourism

Congress finally passed the Travel Promotion Act (TPA) and President Barack Obama signed it into law on March 4, 2010.  AH&LA President and CEO Joseph McInerney said, “Achieving this victory was the result of years of hard work by many individuals in the travel industry and Congress.  I want to personally thank Senate Majority Leader Harry Reid, who early on recognized the importance of this bill to the U.S. travel industry.  He understood what we have been saying all along about the TPA, its ability to create jobs, and the economic stimulus thousands of American lodging and tourism-related business will receive from it.”

The legislation creates the Corporation for Travel Promotion, a public-private partnership to attract more visitors to the U.S. Part of the funding comes from a $10 entry fee levied on inbound visitors from countries included in the Visa Waiver Program except Canada.  Other countries charge considerably more as much as $25 or $50- and countries like the U.K. $80 for a coach ticket and $140 for a first-class ticket.  This bill will reduce the federal deficit by more than $425 million and the U.S. Travel Association estimates it will create 40,000 jobs in the first year.

3.  Congratulations to the Harris Rosen Foundation

When Haiti experienced a devastating earthquake, Orlando hotelier Harris Rosen, Sen. Bill Nelson and Orlando’s Haitian community joined hands to provide a relief fund of one million dollars in order to help the victims.  The Rosen organization has not confined itself to raising financial donations but is also engaged in providing first aid, medical and hygiene supplies, towels and clothes.  The relief effort also includes flashlights, batteries, bug spray and various other necessities.  Medical personnel are also working on a disaster footing to provide medical treatment to the victims.  The Harris Rosen Foundation has taken up the responsibility of channeling the money appropriately and has guaranteed 100 percent utilization.  Rosen said that even after they achieve the initially-set target of one million dollars, their efforts would continue as the damage done by the earthquake is immense and needs long-term commitment. 

4.  Judge Grants Summary Judgment to Super 8 Franchisees

Legal reporter Janet Sparks reported on the BlueMauMau website (2/19/10):

Souix Falls, S.D.:   Federal Judge Lawrence L. Piersol signed on Tuesday an order granting and yet denying in part the motion for summary judgment filed on behalf of 160 franchisees, and denying Super 8 Motels’ motion for summary judgment entirely.

The class action lawsuit was filed to determine if Super 8 breached its franchise agreement with the motel owners when it imposed a five percent fee on room sales to customers registered with is TripRewards Program.

In response to this latest ruling, Scott Abdallah of Johnson, Heiderpriem & Abdallah, representing the franchisee plaintiffs, said, “Obviously, our clients are very pleased with the court’s decision.  We have felt all along that this was a straightforward breach of contract case, and the Court agreed.”

Judge Piersol clearly states that the agreement specific to these 160 motel operators does not permit Super 8 to charge the five percent fee.  He declares in his ruling, “The Agreement provides that franchisees will be charged 2 percent, not a 7 percent fee for a franchisee’s participation in the customer loyalty program.” In answer to the franchisor’s argument for the additional fee, the judge explained that even if Super 8 has the right in its contract to change its system standards and rules of operation, including its customer loyalty program, it may not unilaterally impose a fee for the operation of that program greater than what is stated in the agreement.

But in his order denying in part the franchisees’ motion for $3 million in compensation, he states that whether any benefits accrued to class members as a result of Super 8’s breach of the agreement and the monetary value of those alleged benefits are issues that need to be determined by a jury.  In a breach of contract, the plaintiffs are entitled to recover all damages, $3,418,112. plus interest in their motion for summary judgment, plus any additional amount paid out by the judgment date of the case.

Although Judge Piersol agrees that franchisees are entitled to reasonable amounts, he questions if the sum they claim are owed them exceeds the actual amount that they would have gained had Super 8 fully performed its contractual duties.  The company had argued that awarding class members the full sum would result in a windfall to the franchisees.  The franchisor’s attorneys argue that the damages figure does not account for the amount the motel owner-operators allegedly save as a result of not being required to give customers participating in the old customer loyalty program.  Company lawyers also state the franchisees ignore income received from room sales to customers seeking to take advantage of the benefits of the TripRewards program.

The judge ruled that the parties will be able to represent their respective “non-speculative” damages positions to the jury.  The trial that was previously scheduled to commence on April 13, is now scheduled for June, 1, 2010.

5.  Quote of the Month

“A great many people think they are thinking when they are merely rearranging their prejudices.”
        William James

Please take note that Stanley Turkel, MHS, ISHC has just published the book “Great American Hoteliers: Pioneers of the Hotel Industry.” It contains 359 pages, 25 illustrations and 16 chapters devoted to each of the following pioneers: John McEntee Bowman, Carl Graham Fisher, Henry Morrison Flagler, John Q. Hammons, Frederick Henry Harvey.  Ernest Henderson, Conrad Nicholson Hilton, Howard Dearing Johnson, J. Willard Marriott, Kanjibhai Patel, Henry Bradley Plant, George Mortimer Pullman, A.M. Sonnabend, Ellsworth Milton Statler, Juan Terry Trippe and Kemmons Wilson.  It also has a foreword by Stephen Rushmore, preface, introduction, bibliography and index. Visit www.greatamericanhoteliers.com to order the book.
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Contact:

Stanley Turkel, MHS, ISHC
917-628-8549
stanturkel@aol.com

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Also See: Nobody Asked Me, But… No. 61 / The Plaza and the Pierre; La Quinta’s Backward Step / Stanley Turkel / February 2010
Nobody Asked Me, But No. 60 / Independence for Independents? Rebranding and Rescaling; Ascend by Choice; Autograph by Marriott; Magnuson Alternative to Franchising; Independent Collection by Hersha / Stanley Turkel / January 2010
Nobody Asked Me, But No.59 / Who’s Side is the FTC On?; Women Hotel Workers Suffer Higher Injury Rates; A Hole on Park Avenue; / Stanley Turkel / December 2009
Nobody Asked Me, But No.58 / Support the Arbitration Fairness Act of 2009; Hi-tech Hotel Rooms in the 19th Century / Stanley Turkel / November 2009
Nobody Asked Me, But No.57 / 10 Bogus Reasons to Buy a Franchise / Stanley Turkel / October 2009
Nobody Asked Me, But No.56 / “Great American Hoteliers: Pioneers of the Hotel Industry”; The Stanley Hotel; Will Hotel Franchisees Remember? / Stanley Turkel / September 2009
Nobody Asked Me, But No.55 / Exterior-Corridor Hotel Properties; Blackstone Denies Hilton Breakup / Stanley Turkel / August 2009
Nobody Asked Me, But No.54 / Famous Japanese Capsule Hotel; Dunkin’ Donuts Independent Franchise Owners Association; Remember Magic Fingers? / Stanley Turkel / July 2009
Nobody Asked Me, But No.53 / Historic Hotel Theresa: the Waldorf of Harlem; Make Mandatory Arbitration Illegal / Stanley Turkel / June 2009
Nobody Asked Me, But No.52 / At Long Last; New York’s Essex House; Origin of Mother’s Day;  An Annual Feast for Number Crunchers; The End of the Hotel Bathtub?/ Stanley Turkel / May 2009
Nobody Asked Me, But No.51 / Transformation of the Shelton Towers Hotel; One Hotel’s Fate 119 Years Ago / Stanley Turkel / April 2009
Nobody Asked Me, But No.50 / Do You Know About O8A? Do Hotel Franchisees Need Independent Associations?The Best Franchise Advisory Councils / Stanley Turkel / March 2009
Nobody Asked Me, But No. 49 / Slave Trading at the Saint Charles Hotel in Washington DC, Why Are Some Hotel Franchise Companies Defranchising Exterior Corridor Hotels / Stanley Turkel / February 2009
Nobody Asked Me, But No. 48 / New President of Wyndham Ignores the Real Issues; Hotel Franchises Compared to Auto Dealer Franchises / Stanley Turkel / January 2009
Nobody Asked Me, But No. 47 / New CEO of Choice Misses an Opportunity; Lost and Forgotten Hotels; Little Known Hotel Facilities in New York / Stanley Turkel / December 2008
Nobody Asked Me, But No. 45/ Remembering John Curry; Hotel Owners Have The Power / Stanley Turkel / October 2008
Nobody Asked Me, But No. 44 / Hotel Franchise Companies Performance Appraisal Report, a Down-to-earth Assessment of the Hotel Capital Markets / Stanley Turkel / September 2008
Nobody Asked Me, But… No. 43  / Hotel Franchisor Companies Ignoring Critical Franchising Issues,  Marriott Leads the Way with Aggressive Environmental Strategies / Stanley Turkel / August 2008
Nobody Asked Me, But No. 42 / Remembering Jack Craver; World Record-Setting Hotels; At Last: A Major Gaming Facility in the Catskills / Stanley Turkel / July 2008
Nobody Asked Me, But No. 41 / Landmark Belleview Biltmore Resort Saved; Hotel Developers Take Note - the Borough of Bronx in NYC Has 1.5 million Residents and Just One Hotel in the AAA Guide; Boutique Hotel Bandwagon / Stanley Turkel / June 2008
Nobody Asked Me, But No. 39 / Say Goodbye To The UFOC; Dunfey Brothers To Be Honored; The Plaza Hotel Reopens After a $400 Million Renovation / Stanley Turkel / April 2008
Nobody Asked Me, But No. 38 / Super 8 Owners Form an Independent Franchise Association; Why Is There a Bible in Every Hotel Room? / Stanley Turkel / March 2008
Nobody Asked Me, But No. 37 / Remember the Savoy Plaza Hotel?; Is Economic Disaster Imminent; Cuba at the Crossroads / Stanley Turkel / February 2008
Nobody Asked Me, But No. 36 / What the Advertisements for the Largest Hotel Franchise Companies Never Mention - Also Measuring Hotel Brand Value / Stanley Turkel / January 2008
Nobody Asked Me, But No. 35 / Casino Expansion Has Transformed America, Exercise Awareness / Stanley Turkel / December 2007
Nobody Asked Me, But… No. 34 / IHG’s Great Idea, Sound-Proofing Hotels, Best Western Enters the Upper Midscale Segment, How to Convert Confusion Into Order,  Sign at a Tarrytown, NY Inn, 1798 / November 2007
Nobody Asked Me, But… No. 33 / 1957 Murder at the Park Sheraton Hotel; How Much Does A Franchise Really Cost?A Marriage Made in Heaven?; A Good Night’s Sleep at the Benjamin Hotel / Stanley Turkel / October 2007
Nobody Asked Me, But… No. 31 - Rhode Island Improves Franchise Rules, What’s Up With Canada? Conversion of a Jail Into a Hotel, The Richest (and Poorest) Places in the U.S. / Stanley Turkel / September 2007
Nobody Asked Me, But… No. 31 - Blackstone's Acquisition of Hilton, The Art of Groveling, The Origin of Franchising / Stanley Turkel / August 2007
Nobody Asked Me, But…. No. 30 / Impertinent Questions In Search of Pertinent Answers: Carbon monoxide detectors, exterior-corridor properties / Stanley Turkel / July 2007
How American-Owned Can You Get?, ISHC's CapEx 2007 Report, The Bowery Hotel / Stanley Turkel / June 2007
Hotel Franchising and State Laws, Is Immigration Important? Save the Biltmore, The Good Old Days, Quote of the Month / Stanley Turkel / May 2007
Nobody Asked Me, But - No. 27 / Hotel Franchise Agreements: Mediation, Arbitration or Litigation? / Stanley Turkel / April 2007
Nobody Asked Me, But - No. 26 / Energy Usage and Potential Savings; Great Art in Hotels; Lifestyle Hotels; The Minimum Wage Issue; Quote of the Month / Stanley Turkel / March 2007
Nobody Asked Me, But - No. 25 / Guestroom Design & Amenities, Get a Human, Best Luxury Hotels in the U.S., Turnpike, The Pineapple as Symbol of Hospitality, Fair Franchising / Stanley Turkel / February 2007
Nobody Asked Me, But - No. 24 / Loose Cannon, Fair Franchising, Manhattan Hotel Profits, Hotels of the Future, Interesting Miscellany, Quote of the Month / Stanley Turkel / January 2007
Nobody Asked Me, But - No. 23 / Biting The Hand That Feeds You?, By The Numbers, Shortage of Hotel Rooms, There is No Free Lunch, Iron Laws of Business Travel, Happy New Year / Stanley Turkel / January 2007
Nobody Asked Me, But - No. 22 / Smart Elevators, Tony Marshall’s Memorial, Women in the Hospitality Industry / Stanley Turkel / December 2006
Nobody Asked Me, But… No. 21 / The Drake Hotel in New York, Fair Franchising is Not an Oxymoron, By the Numbers, Another Secret Underground Shelter, Passing of Anthony G. Marshall / Stanley Turkel / December 2006
Nobody Asked Me, But… No. 20 / Turnabout Is Fairplay, Secret Underground Shelter, By the Numbers, Genuine Fair Franchising/ Stanley Turkel / November 2006
Nobody Asked Me, But… No. 19 / International Society of Hospitality Consultants, Great Miami Hotels, Reduce Carbon Monoxide Emissions, Turn Gray Into Gold / Stanley Turkel / November 2006
Nobody Asked Me, But… No. 18 / John Q. Hammons, Save the Belleview Biltmore, Chinese Tourism, CFLs, Ernie Byfield, Guestroom Entertainment in 1905 / Stanley Turkel / October 2006
Nobody Asked Me, But… No. 17 - AAHOA's 12 Points of Fair Franchising, Protected Territories, / Stanley Turkel / September 2006
The Newest Independent (and Oldest Partially Independent) Franchise Association in the Hotel Industry / Stanley Turkel / September 2006
In Hotel Franchising, Reality Trumps Wishful Thinking / Stanley Turkel / August 2006
Nobody Asked Me, But… No. 14; Impact Studies, Stretching Segments, Short-Stay Rentals, Smoke-free Marriotts, Franchising in China, Save the Belleview Biltmore Hotel / August 2006
The U.S. Population Age 65 and Over is Expected to Double in the Next 25 Years; What Does this Mean for the Hotel Industry? / Stanley Turkel / July 2006
Nobody Asked Me, But… No. 12; Portman, Women Homeowners, Minimum Wage, Tipping, Brooklyn Bridge, Chinese Tourism, Impact Studies / Stanley Turkel / July 2006
Do Hotel Franchisees Need Independent Franchise Associations? / Stanley Turkel / June 2006
Nobody Asked Me, But… No. 10 / Chinese Tourists, Gasoline Prices and Alternatives, GLBT Segment, Travel Agents, FAC's, Manhattan's Record Breaking Year, Impertinent Questions / Stanley Turkel / June 2006
Nobody Asked Me, But… No. 9 / Blang, Bathtubs, Best Green, Arbitration, Best Western, AAHOA, State Franchising Laws, VFR / Stanley Turkel / May 2006
Nobody Asked Me, But… No. 8; Bathtubs, Smokefree Hotels, Maps, Saving Water, Nevada Revenues, H.P. Rama, Ritz-Carlton, Statler Service Code, Mother’s Day / Stanley Turkel / April 2006
Nobody Asked Me, But….No. 7 / Stanley Turkel, MHS, ISHC / March 2006
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