AAHOA recently released an updated ’12 Points of Fair Franchising‘ guidelines. The purpose of the 12 points is to facilitate improved relationships and encourage more equitable and fair franchising agreements between AAHOA member franchisors and franchisees.
“Because of the changing business environment post-COVID-19 and the ever-evolving need to educate our members, it was time for AAHOA to revisit the 12 Points to ensure they’re relevant and reflective of industry changes and evolution,” AAHOA Chair Vinay Patel said.
Following this announcement, Marriott International has decided to distance itself and end its relationship with AAHOA. The reason cited by Marriott is that these 12 points run counter to its business model and interests.
In a letter appearing to be from Marriott International, the company stated that it was re-evauluating its relationship with AAHOA in the wake of the organization’s renewed stance on franchising.
“Ultimately, Marriott cannot support, either by endorsement and/or financially, any organization that is in direct opposition to our business model and interests,” the letter stated.
The letter went on further, “we believe quite strongly that the longstanding relationship between Marriott and AAHOA has proven to be mutually beneficial, and we are deeply saddened that AAHOA has chosen to pivot its stance on these key issues in a way that is decidedly anti-franchising and anti-Marriott (especially since, as the AAHOA leadership shared with us in a recent meeting, neither AAHOA’s leaders nor its members have any material issues with Marriott’s approach to franchising or to our franchisees).”
It is still unclear as to who issued that letter. Marriott International has not yet responded when asked for confirmation and clarification.
Neal Patel from AAHOA had the following words to say about the Marriott letter, “since our current understanding is that the Marriott letter is in draft form, which has not officially been issued by Marriott to the AAHOA Officers or President & CEO, we are awaiting an official response from Marriott. The tone and content of the draft letter are very serious and explicitly state where Marriott stands in relation to AAHOA and fair franchising.”
Neal Patel went on to reiterate support to advancing the collective interests of the American hotel owners. Patel said the organization is committed to ensuring the implementation of fair franchising practices in the hospitality industry.
“AAHOA has stood, and will continue to stand, for fairness in franchising, especially involving the education of our members. That is one of our core values,” Mr Patel continued.
AAHOA’s 12 Points of Fair Franchising, “a best-practice approach to designing, developing, and implementing best-in-class, mutually beneficial franchise systems” was first introduced in the yer 1998 and is regularly updated since then. The points cover things like liquidated damages, quality guarantees, vendor exclusivity, dispute resolution, franchise sales ethics and choice-of-law clauses.