Franchisees want to be in business for themselves but not by themselves. Ownership
of a franchise can bring considerable benefits – franchisees can brand
their hotel with one of our well-known and popular brands, while the franchise
contract provides a powerful set of tools to drive new business.
- Deliver the strongest brand portfolio in the industry
- Deliver the strongest set of tools in the industry
- Develop the strongest approach to standards in the industry
- Develop the strongest General Manager talent in the industry
- Maintain the strongest reputation for doing business the right way
Other services available to franchisees include training programmes, a consultation
and advice service and optional marketing programmes.
This following is a diagram of the Franchise Revenue Business Model
Net System Growth
Relative Brand Premia
Relationship with owner
IHG franchise revenue has three levers to drive future growth. Some of the
factors that influence these levers are under our direct control, like rooms'
growth, and others are influenced by market forces, such as the performance
of our brands relative to competitors' brands.
The franchise contract is generally a standard contract, with some variation
across the world. A sample contract would have a royalty fee of 5% of rooms'
revenue. However this also varies across brands and countries.