A contract between a hotel owner and a hotel franchise company where the franchise company allows a hotel to use its services and name for a fee. Services a franchisor can provide are for example national advertising, reservation system, employee training and other benefits depending on the hotel franchise company. A hotel franchise contract usually lasts 20 years, but depending on the hotel and franchise company the contract length can from 5 years to, in rare cases, 100 years.
This contract also requires that the hotel meets certain standards or admits to certain rules & regulations in order to keep the contract. Examples therefore are that the franchisor requires the hotel to purchase furniture from its approved suppliers, the use of the company’s property management system, franchise inspections for quality of facilities, upgrades to the hotel every few years or decades and other mandatory requests by the franchise company.