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.
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
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.
The IHG Owners Association is the first association of owners in the hotel industry and comprises IHG franchisees throughout the world. It represents the interests of nearly 3,000 owners and operators of IHG hotel brands. The Association works collaboratively with IHG to maintain the highest professional hospitality standards for the brands.
The IHG Owners Association has established 5 key priorities:
Hotel operating profits that meet or exceed industry averages and fair returns on investment will be the result of these collective efforts.
The Association also represents members' interests to the broader hotel industry on legislative issues, along with vendors and other resources, helping to achieve the objectives outlined above.
Last updated 8 May 2013