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Negotiating Franchise Agreements When Considering Purchasing a Hotel Franchise

When considering the purchase of a franchise one of the most important things you will want to consider is what the franchise agreement will contain.  You will want to figure out all of your terms that are important to you.  One quick way to determine what is "important" to negotiate over with the franchisor is figuring out what is a want and what is a need for your company. 

One type of franchise that particularly needs reviewing when it comes to the franchise agreement is for those considering to purchase a hotel franchise.  As a prospective hotel franchisee you will want to make sure that the terms you need are included in the franchise agreement.  If there is a term that you need in the contract (not just want) you may actually consider looking elsewhere if it is that essential to your franchise location thriving. 

Hotel franchise agreements should be reviewed very carefully with the assistance of a franchise attorney.  A franchise attorney will be able to help you fully understand the franchise agreements terms and also make sure that your best interests are protected.  This is very important when considering the purchase of a hotel because hotel buildings are so expensive and so is the services and products that need to be offered to run a hotel. 

According to a recent article in Hotels Magazine many more hotel owners and those considering purchasing a hotel are deciding to become a part of a larger, well known hotel name and joining up with a well establisthed franchise hotel. 

Here are some of the initial steps that will occur that lead up to your franchise agreement for the hotel purchase:

• First you will want to find a hotel franchise that suits your needs as a prospective franchisee
• Conduct the proper due diligence
• Determine what you need vs. what you want
• Review of the Franchise Disclosure Documents (FDD).  During this stage of the process is it important to have spoken and actively have the assistance of a franchise lawyer.
  
• Enter into a Letter of Intent sheet with the franchisor.  This will help the franchisor understand what key business points are important to you and will allow you to know if the expectations can be met.  This is not legally binding.
  
• Signing the franchise agreement.  At this point you will have figured out what terms you are looking.  This agreement is a binding agreement with the franchisor of the hotel company. 
  

For more useful information and tips for franchisees visit franchise lawyer Charles Internicola's blog.