Top 250 Franchise by Entrepreneur – Rank no.54 – Choice Hotels Int’l.- US
Products & Services: Hotels
Number of Locations: 6,290
Total Investment: $88.05K – 14.43M
Began Franchising: 1962
About Choice Hotels Int’l.
In 1939, seven motor court owners in Florida met and decided they could be more successful working together, establishing standards for service and quality and helping each other to fill their rooms through a referral system. More and more owners joined and eventually the company, then Quality Courts United, decided to begin franchising. Today the company is known as Choice Hotels International, which includes 11 hotel brands ranging from the economy to upscale segments.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $10,000 – $60,000
Ongoing Royalty Fee: Varies
Term of Franchise Agreement: 10-20 years
Net Worth: $750,000
Liquid Cash Available: $250,000
20% of all franchisees own more than one unit. Absentee ownership of franchise is allowed..
|FINANCING TYPE||IN-HOUSE||THIRD PARTY|
How This Franchise Supports Franchisees
Franchise Ranking History
|Traded as||NYSE: CHH|
|Headquarters||Rockville, Maryland, U.S.|
|Number of locations||7,000|
|Area served||World Wide|
|Key people||-Steve Joyce, President andCEO
-David White, CFO
-William Carlson, Senior Vice President of Marketing
-Pat Pacious, Senior Vice President of Corp Development & Information Technology
Suburban Extended Stay Hotel
|Revenue||642M Million (2008)|
|Net income||112.8 Million|
Choice Hotels International, Inc. is a hospitality holding corporation based in Rockville, Maryland. The company owns the motel brands Comfort Inn, Comfort Suites, Quality Inn, Sleep Inn, Clarion, Cambria Suites, Mainstay Suites, Suburban Extended Stay,Econo Lodge, Rodeway Inn, and Ascend Collection. In 2008, Choice Hotels’ total revenue was $642 million, of which $637 million was from Franchise and $4.94 million was from Corporate Items.
The company was started in 1939 in Maryland as Quality Courts United, a referral chain consisting of about seven motel owners. Later, the motel chain operated simply under the name Quality Motels (1969–71) and Quality Inns (since 1972). Quality Courts United accepted franchise hotels without strict norms or guidelines from the company. This is different from Holiday Inn which from their early beginnings implemented numerous mandatory standards and guidelines (e.g. room size and amenities) at every one of their locations. Also, Quality Inn accepted franchisees with existing hotels.
During its early years, Quality Courts’ operations were entirely in areas of the U.S. east of the Mississippi River and portions of Canada. From 1946 to 1964, Quality had a marketing partnership with Best Western, whose properties were located mostly west of the Mississippi River, and thus not in direct competition with Quality. It was abandoned in 1964 as Best Western expanded into the Eastern U.S. with its Best Eastern operation (which was replaced by a nationwide Best Western operation in 1967). Quality Courts began its efforts toward national coverage in 1966 when it opened a motel in St. Louis, Missouri and two in Texas at Houston andArlington.
The company became Quality International as the company switched to franchising in 1972. A few years later, the franchising well on its way, about 300 hotels were independently owned and only about 38 were still company-owned.
1980s: Introduction of other brands
In 1982, Quality Inns began segmentation by introducing Comfort Inns and Quality Royale. Comfort Inn competes with such chains such as AmericInn Hotels, Baymont Inn & Suites, and Fairfield Inn by Marriott; Quality Royale was meant to compete with upper mid-priced chains like Red Lion and Four Points by Sheraton. Quality Royale was converted to Clarion Hotels in 1987. It represented a line of full-service hotels that offer travelers a variety of hotel styles and locations, from city centers, airport, and resorts. Clarion provides a full spectrum of services – including full service restaurants, lounges, room service, and banquet and conference centers. Clarion’s boutique line, Clarion Collection (now Ascend Collection), is an extension of the brand. Ascend Collection is designed for high-end, boutique and historic hotels that have an established local identity.
Two all-suite divisions, Comfort Suites and Quality Suites, were introduced as the first mid-market all-suite chains. The original Quality Inn brand competes with Holiday Inn, Best Western, and Ramada. Many former Holiday Inns were refranchised as Quality Inns during the 1990s and 2000s. Conversely, Quality eliminated more than half of its original locations.
In 1989, the company introduced McSleep, an economy brand utilizing a consistent interior corridor design prototype and all-new construction, designed by Rob Spurr. The name was soon changed to Sleep Inn after litigation from McDonald’s. Sleep Inn and Sleep Inn and Suites are lower mid-priced. Since then, over 320 locations are open. All offer a “Morning Medley” deluxe continental breakfast, swimming pools at most locations, free-local calls, and a consistent exterior/interior design. The brand is receiving its first major facelift in history with its “Brand Refresh”. This is essentially a modernization of all properties by 2012 with new boutique-inspired guest rooms and public spaces.
The company bought the three economy-oriented chains known as Friendship Inns, Rodeway Inn, and Econo Lodge in the early 1990s, while changing the corporate name to Choice Hotels International. Friendship Inns, founded in Salt Lake City, Utah in 1961, were later absorbed into the Rodeway and Econo Lodge chains.
In 1997, the company introduced the extended-stay Mainstay Suites brand and the Choice Privileges frequent guest loyalty program. Mainstay Suites was branded as mid-priced extended stay hotels, franchised by Choice Hotels International.
In January 2005 Choice Hotels introduced a new upscale, all-suite hotel designed in contemporary style called Cambria Suites. The first Cambria Suites opened in Boise, Idahoon April 17, 2007. Approximately 20 Cambria Suites hotels are planned, with locations such as Bloomington, Minnesota and Savannah, Georgia scheduled to open in 2007.
In 2008 the company introduced the Ascend Collection (formerly Clarion Collection), an elite upscale membership collection of historic, boutique and unique hotels.
In 2010 CEO Steve Joyce was featured on an episode of Undercover Boss, a television program on CBS. He pretended to be an intern doing entry level jobs such as working the front desk, housekeeping, and maintenance work such as unclogging toilets.
In October 2010 Maryland and Montgomery County officials announced that Choice Hotels International will move its headquarters from suburban Silver Spring to Rockville (about 20 minutes north-west of its current location) in 2013. Choice Hotels’ new headquarters will be located in Rockville Town Center.
In August 2011 Choice Hotels broke ground on its 197,866 square-foot corporate headquarters in Rockville.