Choice's strategic plan empowers each new regional management
team with responsibility for maximizing Choice's revenues and profitability by developing
the right mix of brands and enhancing franchisee performance through the effective
delivery of services.
There are three key components to this strategy: 1) establishing regional
profit-and-loss responsibility, 2) integrating geographic mapping and joint planning with
franchisees and 3) enforcing quality assurance standards.
By placing profit-and-loss responsibility in each region, Choice creates a natural
balance between the need to expand the number of properties and the need to grow RevPAR
for existing hotels.
The corporate staff will continue to establish growth plans and revenue targets by
brand. The regions will be responsible for implementing the plans and maximizing their
respective areas of profitability.
A Market Plan for Development
By mapping the geographic location of existing hotels in a market and analyzing that
area's trends, Choice plans to select the best sites for future development and the best
brands to fit each site.
Choice will give current franchisees the opportunity to develop each new site in their
Franchise service directors will be given incentives to rapidly solve quality assurance
issues. Consumer input, physical inspections and complaints all will be factored into each
hotel's quality review.
Loan Program Nurtures Existing Franchisees
The Company actively encourages Choice franchisees to develop more hotels. This has
proved very successful over the years, with more than 50 percent of all new deals executed
with existing franchisees.
To advance that trend, the Company this year introduced a $100 million loan program
financed by Salomon Brothers for multiple-unit franchisees who have distinguished
themselves as outstanding operators.
The program, offering loans of $1.5 to $6 million, enables developers to secure both
construction and long-term financing in one package, eliminating the uncertainty
associated with rolling construction financing into permanent mortgages.