“Franchising or not? That is the question”: Read the latest Mariano Faz interview to Publituris

To be or not to be?” remains one of the most iconic phrases in world literature. Hamlet explored a deep existentialism, questioning the meaning of life and other aspects that we find in Shakespeare’s work. This constant reflection also manifests itself in the hotel sector. With increasing competition, to differentiate yourself, it is crucial to identify yourself through a brand. In this process, you face two major decisions: to franchise or not to franchise?

Just as it is difficult to give a definitive answer to William Shakespeare’s reflection, it is also difficult to decide between creating your own brand or joining an existing one. However, we can consider five important considerations when evaluating this decision:

1. Investment in marketing: When creating a brand from scratch, the investment and allocation of resources must be aligned with the desired positioning. Statistics show that every day between two and three new hotel brands are created worldwide, reflecting the high competitiveness of hotel branding . This requires a higher level of investment and dedication. This investment in resources and time must therefore be compared with the cost of joining an existing brand.

2. Managing expectations: When we fall in love with certain brands or projects, we inevitably generate expectations. If you decide to franchise, it is essential to analyze the value that the brand brings. I have seen cases where the implementation of a brand was not suitable for the location or concept of the hotel, resulting in frustration. However, in some situations, this perception changed after a detailed analysis and market benchmarking . Therefore, before evaluating whether your brand, whether franchised or owned, is meeting expectations, it is important to be realistic about our expectations and the market.

3. Partners: When you create a brand, you are the only person responsible and partner. When you introduce a franchise, you are entering into a long-term partnership relationship. A relationship that must be managed from day one. Not all organizations are prepared to work in this way, either because they prefer to make decisions in a more personalized way, or because they have historically worked well without this type of relationship. Therefore, it is important to identify the areas of value and those in which it is better to count on a partner . In other words, the mindset has to be the right one. If it is not well managed and understood, it leads to frustration. More than once in my career I have seen relationships that could have been fruitful end due to a lack of understanding, when, if the mindset had been the right one, both parties would have benefited exponentially.

4. Analyze the strength of direct channels: It is essential to be clear about the channels through which the hotel will be marketed. When opting for a franchise, you work with the brand channel. On the other hand, when marketing with an independent brand, you must carefully select suppliers that add additional value to the hotel. Which of the two options brings more reservations to the hotel? Several variables contribute. It is important to analyze the channel costs, the percentages of contribution to the sales mix , the final cost per customer and the fixed cost of all those small concepts, called fixed fees , associated with the channel.

5. Operation: Franchising involves the application of a series of operational standards aligned with the brand. It is the operational teams that must adapt. On the other hand, if the hotel is not franchised, creating standards is a more laborious process, but with the advantage that these standards are adapted to the hotel. Knowing the reality of the hotel and its teams also influences this analysis.

In short, the question Hamlet raised in his monologue is completely extrapolatable to our sector. There are no right answers, however, it is essential to be clear about our objectives, expectations and priorities, as well as to have in-depth knowledge of the type of hotel or organization we work for before making a decision. Ultimately, to become, for a day, our own Hamlet.

Read the original article, here!