Page 165 - 100 Great Marketing Ideas (100 Great Ideas)

dramatically reduces the business risk (and goes down well with
the bank, too), and also allows the hotel to tap into Holiday Inns’
existing branding and reputation.
From the viewpoint of the parent company, franchising has allowed
a much more rapid growth than would otherwise have been
possible. Franchisees pay fees and royalties for being allowed to use
the format, and although the overall profit per hotel might be lower
than would be the case for directly owned hotels, Holiday Inns are
able to open an average of one hotel per day somewhere in the world.
There is no question that Holiday Inns could never have grown as
rapidly as they have without franchising—being prepared to share
the idea, and the wealth.

In practice

• Your business model must be proven to work.
• You will need to allow early franchisers in at a lower rate than

you would like to charge later ones—after all, you are still an
unknown quantity.

• You must have a very clear manual, covering every possible

circumstance: apart from the need for franchisees to know how
to operate, this will ensure you keep your brand values intact.

• Accept that you will have to provide a lot of support in the early

stages, but regard this as an investment in the future.

156 • 100 GREAT MARKETING IDEAS