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 markets.

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.


  A Year of Firsts     Financial Highlights     Letter to Our Stockholders     Focusing on the Franchisees     Optimizing the Brand Portfolio     Increasing Market Penetration     Improving Margins     Growing Overseas Operations     Leveraging the Spinoff of Franchise Operations