Group items tagged

AAHOA MEMBERS RECENTLY testified in support of New Jersey Assembly Bill 1958, which would make changes to the New Jersey Franchise Practices Act that could benefit the hospitality industry. The association's support for specific parts of the bill is at the center of a division between AAHOA and two major hotel companies over franchise reform. On March 22, 30 AAHOA members attended a hearing of the New Jersey Assembly Commerce and Economic Development Committee during which the bill was passed out of the committee. Several of the members also testified, according to AAHOA. AAHOA members own 45.4 percent of New Jersey hotels, representing 46,124 rooms, the association said. "As the largest hotel owners association, representing the exclusive interests of America's hotel owners, AAHOA showed up in New Jersey to testify in support of amendments to the legislation to improve the franchise model," said Nishant "Neal" Patel, AAHOA chairman. Last May, a contingent of AAHOA members testified in favor of the bill in front of the New Jersey Assembly Judiciary Committee, particularly the aspects of the bill that match AAHOA's 12 Points of Fair Franchising. Specifically, the franchise reform changes supported by AAHOA include restricting non-competes for longer than six months; prohibiting requiring a relocation or capital investment greater than $25,000 more than once every five years unless hotel franchisers can establish a return on the investment; requiring a franchiser that receives "any rebate, commission, kickback, services, other consideration or anything of value" to fully disclose them to the franchisee and turn them over to the franchisee; putting restrictions on mandatory sourcing of goods or resources; and prohibiting suspending, restricting or preventing access to franchise services.

THE NEW JERSEY legislature is considering legislation that would strengthen protections for franchise businesses in the state, including hotels. AAHOA recently visited the state's capital to express its support for the bill. Assembly Bill 1958 would make changes to the New Jersey Franchise Practices Act that could benefit the hospitality industry, AAHOA said in a statement. Specifically, the changes include restricting non-competes for longer than six months; prohibiting requiring a relocation or capital investment greater than $25,000 more than once every five years unless hotel franchisers can establish a return on the investment; requiring a franchiser that receives "any rebate, commission, kickback, services, other consideration or anything of value" to fully disclose them to the franchisee and turn them over to the franchisee; putting restrictions on mandatory sourcing of goods or resources; and prohibiting suspending, restricting or preventing access to franchise services. Several AAHOA representatives attended a hearing at the New Jersey State Assembly on May 12 to support the bill. They included AAHOA's Mid Atlantic Regional Director Mahendra "MZ" Patel, Past Chair Bhavesh Patel and Laura Lee Blake, the association's recently appointed president and CEO.

THE PROPOSED FRANCHISE reform legislation in New Jersey that has driven a rift between AAHOA and several large hotel companies has stalled in the state's legislature. AAHOA said it was misinformation that delayed the bill's passage, while the American Hotel & Lodging Association said the bill "would have destroyed the hotel industry's franchise model." It will return Assembly Bill 1958 would make changes to the New Jersey Franchise Practices Act that could benefit the hospitality industry, AAHOA said previously. Specifically, the changes include restricting non-competes for longer than six months; prohibiting requiring a relocation or capital investment greater than $25,000 more than once every five years unless hotel franchisers can establish a return on the investment; requiring a franchiser that receives "any rebate, commission, kickback, services, other consideration or anything of value" to fully disclose them to the franchisee and turn them over to the franchisee; putting restrictions on mandatory sourcing of goods or resources; and prohibiting suspending, restricting or preventing access to franchise services.

A LETTER APPEARING to be from Marriott International stating that the company was "re-evaluating" its official relationship with AAHOA over the association's new stance on franchise relations is causing some disruption on social media. Marriott and AAHOA have not responded to repeated requests for comment on the letter, but in an email to members AAHOA Chairman Neal Patel said the letter is a draft and the company and association are still in negotiations. The letter specifically cites AAHOA's request that the company reassess its franchising policies in light of AAHOA's recently released "12 Points of Fair Franchising." Also, it mentions AAHOA's support for New Jersey's proposed Assembly Bill 1958 that would make changes to the New Jersey Franchise Practices Act similar to the guidelines laid out in the 12 Points. "Ultimately, Marriott cannot support, either by endorsement and/or financially, any organization that is in direct opposition to our business model and interests," Marriott said in the letter. "We believe quite strongly that the longstanding relationship between Marriott and AAHOA has proven to be mutually beneficial, and we are deeply saddened that AAHOA has chosen to pivot its stance on these key issues in a way that is decidedly anti-franchising and anti-Marriott (especially since, as the AAHOA leadership shared with us in a recent meeting, neither AAHOA's leaders nor its members have any material issues with Marriott's approach to franchising or to our franchisees)."