Nationwide Franchise Assistance for Hotel Owners
Third-party Arbitration, Mediation and Negotiation Services offers Licensees affordable Alternatives to Franchise Litigation
By Steve Belmonte
If you feel limited as to your options in negotiations with franchise companies, there’s new hope. Third-party arbitration, mediation and negotiation services are available to licensees to help them avoid costly litigation.
Hospitality experts who once walked-the-walk and talked-the-talk of a franchisor can use their experience to help licensees negotiate out of those agreements. For example, if concerns or disagreements arise during the term of the license agreements, third-party experts can be called upon for assistance.
There is so much that goes into the relationship between a franchisor and franchisee. In order to be successful, a third-party negotiator must be able to represent important issues on behalf of franchisees to the franchise community. The only way to accomplish this is to have a detailed understanding of issues affecting each side, a degree of compassion and the ability to be tough, but honest.
There are many issues that arise between franchisor and franchisee that have the potential to become contentious. All too often those issues cannot be resolved in meetings between the two parties and then one or both make the decision to hire legal counsel in order to get the matter straightened out. Suddenly what was a two-entity partnership now becomes four entities as legal teams from each side set their sites on resolving the case for the betterment of their respective client, but also improving the bottom lines financially of their respective law firms.
This is not to say that we begrudge the opportunity for lawyers to make a living and profit off their chosen professions. Many of my best friends have law degrees, and they see their roles as important parts of the American judicial system. But the way the judicial system is set up today and the case loads that jam the dockets of this nation's courts, it is inevitable that lawsuits—many of which are frivolous—become time consuming and money consuming and often work to forever damage what at one time was a friendly and workable business partnership.
Who's to blame? Probably the best answer to that question is the one to blame are those who go around constantly looking for someone to blame. The more important task at hand is finding a way to fix the system without engaging in the tedious process of finger pointing. it serves no useful purpose and gobbles up valuable time and money.
The Asian American Hotel Owners Assn. has done more than any organization in the history of the lodging industry to improve the relationship between franchisor and franchisee. While it is true that AAHOA has not always had a clear picture of what franchisors face in an extremely competitive marketplace, it is equally true that it is the franchisees who have been the most in need of the type of assistance offered by AAHOA.
In many cases, hotel owners have embarked on a brand new career when purchasing that first hotel. And that means they are not always savvy to how the game is played or what works best in the lodging marketplace. These "little guys" are most susceptible to what some might refer to as predatory behavior on the parts of franchisors, but, in actuality, it is often their own failure in that they have not taken full advantage of the numerous programs that franchisors offer to help its franchisees achieve the American dream.
AAHOA has worked long and hard to represent itself as a proactive force on franchisor/franchisee issues. Members should take full advantage of the ability to tap the talents of experts who have prior franchise experience. This experience makes it possible for the franchisee to know where he or she stands before going into a negotiation situation.
Whether the situation involves accident liability losses, terminated license agreements or situations of non-performance by the franchisee or franchisor, experts can help cut through the legalese to identify the real problem and find a solution.
Mediation is becoming an important tool in the franchise marketplace and the best mediators are those who have a through understanding of everything faced in business by those on each side of an issue.
The potential now exists for franchisees and franchisors to find common ground in problems through the services of a mediator and at a cost that is a fraction of what will be paid if the two sides choose to involve lawyers and the court system in a dispute.
Franchisees, particularly those involved with AAHOA, have come a long way in the past few years toward establishing more equitable franchise agreements, and franchisors have worked hard to improve a system that at onetime was terribly one-sided.
However, problems still remain, and as with any relationship, disagreements can crop up that become the proverbial mole hill growing into a mountain. Past experience tells me that lawyers all too often are willing to let that mole hill grow and grow, because then it becomes a necessity to have a lawyer guide litigants over or around that mountain.
What this industry needs more of is mediation and mediators who understand that the overall health of business is greatly dependent on seeing to it that the mole hill remains just that—a manageable mole hill.
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