Franchise & management selection: Making optimal decisions

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Due to complexity, hospitality assets require a high degree of management and marketing expertise. Different owners have different hold horizons and investment return requirements. Selecting management and a brand that best meet specific needs is a critical step toward actually achieving targeted financial returns.

How PwC can help you

An asset's physical product and condition, shifts in demand patterns in a market and owner's investment criteria all can play parts in the selection of management and branding. Through our operating, technical and marketing experience, PwC Hospitality & Leisure specialists help owners through the processes of identifying and selecting management and branding that drive value.
Establishing a contract between owner and manager and/or brand that works for all parties is critical to achieve the expected financial outcomes for owners and service providers. PwC Hospitality & Leisure specialists assist owners with structuring their management and franchise agreements with third-party managers and brands.

Our franchise and management selection services include:

  • Establishing the nature of the relationship (agency or service contract)
  • Base and incentive fees (management)
  • Royalty fees (franchise)
  • Allocation of chain services, central and regional office services and affinity (frequent guest) programs
  • Purchasing policy disclosure and approval
  • Timing of payments to operator (management) or brand (franchise)
  • Information technology systems, financial and management reporting, property management systems
  • Changes to brand standards (if managed by a brand or franchised)
  • Authorization of capital expenditures
  • Territorial restrictions, performance clauses and termination provisions

Beyond assisting clients in structuring contracts, PwC provides industry services to owners of hospitality assets in many different areas surrounding management and franchise agreements. Other areas we assist our clients include:

  • Management of cash
  • Brand advertising, affinity programs and reservations
  • Chain allocations and direct charges
  • Purchasing

The selection of a management company and brand is a critical component to the overall success of a hospitality asset. PwC Hospitality & Leisure specialists assist our clients with comprehensive analysis and selections of a brand and operator, and when negotiating their management and franchise agreements.

Contact us

Steven J. Barr
Consumer Markets Leader, PwC US
Tel: +1 (415) 498 5190
Email

Eric Shin
Consumer Markets Tax Leader, PwC US
Tel: +1 (646) 471 0902
Email

Ron Kinghorn
Consumer Markets Advisory Leader, PwC US
Tel: +1 (617) 530 5938
Email

Melissa Palmer
Consumer Markets Assurance Leader, PwC US
Tel: +1 (617) 530 4473
Email

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