12 Points of Fair Franchising LOGO (for website)

AAHOA Points of Fair Franchising

 

NEW! Updated in 2022

A best-practice approach to designing, developing, and implementing best-in-class, mutually beneficial franchise systems

In 1998, AAHOA identified certain best practices for the hospitality franchise system. AAHOA called those best practices the 12 Points of Fair Franchising (“12 Points”). AAHOA has continuously updated the 12 Points to reflect business changes and the long-term, mutually beneficial relationship between industry Franchisors and Franchisees.

The revised 12 Points continue this mission as an educational primer for hospitality Franchisors and AAHOA Members (current and future hospitality Franchisees) to discuss and use to continue designing, developing, and implementing best-in-class, mutually beneficial franchise systems.



12 Points Overview: A High-Level Synopsis of the 12 Points

 

12 Points - Point 1

TERMINATION RIGHTS AND LIQUIDATED DAMAGES

A best-practice approach to voluntary buyout or involuntary termination, liquidated damages, windows provisions, early termination, and Franchisee termination rights
 

12 Points - Point 2

IMPACT, ENCROACHMENT, AND CROSS-BRAND PROTECTION

How to establish a fair and reasonable formula to protect a Franchisee’s assets


12 Points - Point 3

MINIMUM PERFORMANCE AND QUALITY GUARANTEES

Minimum brand performance and quality guarantees from franchisors related to public image and reputation
 

12 Points - Point 4

QUALITY ASSURANCE INSPECTIONS AND GUEST SURVEYS

Ensuring consistent, unbiased, and reasonable standards for quality assurance inspections and accuracy of QA reports


12 Points - Point 5

VENDOR EXCLUSIVITY, REBATES, AND AFFILIATED COMPANIES AS VENDORS

Ensure competitive pricing
 

12 Points - Point 6

FULL TRANSPARENCY OF FRANCHISEE-FUNDED PROGRAMS AND FEES

The disclosure and accountability for the expenditure of marketing, loyalty, and reservation fees


12 Points - Point 7

MAINTAINING AND BUILDING RELATIONSHIPS

Establishing fruitful, long-term business relationships through recognition of value and effective communication
 

12 Points - Point 8

DISPUTE RESOLUTION

Creating a commitment to establish an independent and fair process for the resolution of disputes related to agreements or relationships


12 Points - Point 9

VENUE AND CHOICE-OF-LAW CLAUSES

Any party pursuing claims in a court of law should do so in the county and state in which the subject facility is located
 

12 Points - Point 10

FRANCHISE SALES ETHICS AND PRACTICES, PROPER DISCLOSURES

The mandate of fair and honest selling practices among Franchisor salespersons and agents


12 Points - Point 11

TRANSFERABILITY

When it comes to transferability, parties should not delay or act unreasonably
 

12 Points - Point 12

SALE OF THE FRANCHISE SYSTEM HOTEL BRAND(S)

Giving notice of a sale to existing Franchisees and pledging to a smooth transition between existing and new Franchisor owners


 12 Points of Fair Franchising - Photo

Download the complete 12 AAHOA Points of Fair Franchising by clicking on the PDF below. 


 12 Points Questionnaire Graphic

Download the 12 AAHOA Points of Fair Franchising Questionnaire by clicking on the PDF below.