If you want to buy a hotel, let Southeast International Hotel Brokers help you decide between a franchise or an independent hotel.

Have you made the decision to buy a hotel? Now, you need to focus in on exactly what you want. Are you looking for an investment with an independent hotel or one belonging to a franchise? The hotel sales business is extremely specialized, and it would be wise to consult a reputable hotel broker such as Southeast International Hotel Brokers to help you weigh the pros and cons of your choice. Even if you are a seasoned hotel owner, Southeast International can help you navigate through this very complex process to buy a hotel.

Ownership Models: Considerations In Your Decision to Buy a Hotel

There are different characteristics that go along with both the independent and franchise business models. This information will allow you to understand the main pros and cons so that you can make the best choice in your situation.

Do You Want Autonomy Or a Ready-Made Model?

If you are new to the hotel ownership business, it might be wise to purchase a franchise where much of the marketing and day-to-day record keeping and reporting systems are already in place. The heavy lifting has been done, providing you with a turnkey operation and a set of products and services that are consistent across the brand. The great thing here, is that you have less responsibility in management decisions, but the downside is that you have little control over how to run your business.

Should You Buy a Hotel with a Brand or Build Your Own?

Generally, there is a quicker ROI with a franchise since there is already a recognizable, trustworthy brand. People have been coming to hotels like yours for years. However, if something happens to create a negative impression of the brand, it can affect your hotel, even if it happened at another location.

It is possible for you to purchase an independent hotel with a strong brand. However, if this is not the case, you will have to implement a successful campaign to establish your own brand and reputation. Do you have the creativity and bandwidth to be successful? Remember that the hotel business is extremely competitive, and you will be taking on a great challenge.

In this case, regardless of the hotel’s current reputation and success, you are purchasing an independent operation. You will be responsible for every aspect of the operation and decision-making. If you like to make all of your own decisions and control all of your business operations, you will want to purchase an independent hotel. You will be spending a much greater amount of time getting your hotel up and running, but you will be more satisfied executing your own plans.

Cautionary Notes On Buying a Franchise Hotel

If you are purchasing a franchise, make sure you are aware of the terms of the franchise agreement and any management agreements. There may be stipulations within the franchise agreement where the franchisor has the right to buy the property back. Management agreements are typically set up for five-year or ten-year terms, but this can be negotiable. Keep in mind, there may be penalties if you choose not to complete a term. Again, part of the value of a franchise is the standardization across locations. If something happens to negatively affect the brand at another location, it can affect your operation.

The Bottom Line

Your decision on which type of hotel you buy will be determined by the type of business operator you are, your risk tolerance, how much effort you are willing to bring to the enterprise, and how much autonomy you desire.

With more than five decades of experience, Southeast International Hotel Brokers can help guide you in your choice to buy a hotel, whether it is independent or a franchise. We will help lead you toward the best financial decision and make sure you are satisfied with your hotel purchase.