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A franchise relationship should be a long-term commitment made to benefit both parties. While both of us are contractually bound and governed solely by the terms of our license agreement together, Hilton Worldwide has created this statement of principles as a philosophy of and guideline for how we believe franchisors and franchisees should do business together.
Our core business principles are based upon such timeless values as teamwork, fair play, mutual respect and open communications. Franchising is a two-way street, and we understand that our franchise owners have expectations of us, just as we have expectations of them. The purpose of Hilton Worldwide's Principles of Franchising is to provide a clear definition of the expectations of the franchisor and franchisee to help us both build an even greater foundation for a solid, long-term relationship.
WHAT WE SHOULD EXPECT
FROM EACH OTHER
| What Hilton Worldwide’s Franchisees Should Expect from Hilton Worldwide |
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We will protect the value of our brands. In the final analysis, our brands are what distinguish us from the competition and are the reason our guests keep coming back to HHC, which helps both of us. We will not compromise on the quality of our brands and hotels.
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We are committed to delivering outstanding service to our franchisees and to helping them maximize the value of the system. Our franchisees are our customers. Our goal is to deliver the same, common-sense service levels that we would expect for ourselves.
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We will work hard to maintain the superiority of our brands. We will continuously monitor and research trends and standards within each brand’s competitive set and introduce on a periodic basis what we believe are the best cost-justified changes in standards and policies. |
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What Hilton Worldwide Expects from Its Franchisees |
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Uphold brand value, product and service quality standards, and our culture of complete guest satisfaction. |
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Total commitment to building customer loyalty. |
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Ensure that your employee team members are well-trained and focused on delivering on our commitment to product and service quality. The long-term health of our brands depends on this commitment. In the guest’s mind, a brand is only as strong as its weakest property. Rigorous enforcement of standards helps both of us. |
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Tell us directly how we can better serve and support you. We invite our franchisees to communicate openly and regularly to provide input to improve our brands and relationships, and will seriously consider all ideas and points of view that benefit the brands and our relationships. |
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Take a proactive role in building new Hilton Worldwide brands in your markets. We expect and encourage our quality Hilton Worldwide franchisees to be the most aggressive developers of our brands, and we will try to help them in that effort. |
The Commitment We Share Together
Both Hilton Worldwide and its franchisees have a mutual interest in maintaining our product and service quality competitive edge. By both parties engaging in the following activities, we can further solidify the strong competitive positions our brands have earned.
| What Hilton Worldwide's Franchisees Should Expect from Hilton Worldwide |
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Develop and manage programs and processes to maintain our product and service quality competitive edge. One of the key strengths of Hilton Worldwide Hotels is a strong commitment to consistency of product and service quality. Together, Hilton Worldwide and its franchisees will constantly look for opportunities to maintain and strengthen that point of difference.
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Work to maintain high levels of customer satisfaction.Hilton will monitor quality and performance, and develop leading-edge programs and products. Franchisors, franchise owners and hotel managers should all be involved in the conception and testing of ideas. |
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| Commitment to Open, Two-Way Communication and Responsiveness Communication is the basis of trust and long-term relationships. Our mutual goal should be to maintain and promote open, two-way communication: |
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Work with an attitude of,
“What can we do to make it right?” |
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Respond to telephone calls within 24 business hours; written correspondence within five business days. |
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Distribute on a regular basis written updates on brand strategies and efforts to support those strategies. |
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Join field-based town-hall sessions with Hilton Worldwide franchisees and owners for feedback and ideas. |
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Develop a brand business plan for the following year by no later than the end of November of each year. |
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Seek and provide regular feedback through a formal survey to measure satisfaction. |
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Provide and use tools and systems to regularly communicate performance results and plans for improvement
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Creating an Open Forum: Franchise Advisory Councils
To encourage and enhance open, two-way communication, an Owners Advisory Council has been established for each brand, comprising a cross-sampling of owners. The councils will act as an open forum and sounding board for new ideas, points of view, and to test the appropriateness of new plans and programs. Each council meets on a regular basis to review the strategic direction of the brand and to provide input and feedback on brand decisions.
Freedom to Choose: Supplier Selection
Purchasing is a critical element in a hotel’s success. Selection of product suppliers, for the most part, is left to the discretion of each franchisee as long as they meet Hilton Worldwide’s specifications. However, certain “core components” (e.g., OnQ™ Technology System, USA Today®, Doubletree® cookies and brand-logoed items such as shampoo) will require mandatory suppliers, for those products where quality and consistency across the brand are necessary or to support the brand’s service and technology requirements.
GROWTH AND NEW DEVELOPMENT
Fair Play and Teamwork: Principles of Development
The same core principles of teamwork, fair play, mutual respect and open communication govern Hilton Worldwide’s growth and new development activities. It is in the long-term best interest of Hilton Worldwide and its franchise system that the brands expand. By pursuing development of hotels that enhance our competitive position, while balancing the interests of the current franchise system, new applicants and ourselves, we increase each brand’s long-term strength and value. Proactive communication should be a guiding principle of this process.
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Multiple Brand Considerations
Hilton Worldwide offers franchisees a wide range of hotel brands and brand extensions, each with a unique and differentiated product and service profile, and at distinct price points. Each Hilton Worldwide brand focuses its competitive efforts on brands outside Hilton Worldwide's Hotels. Where appropriate, Hilton Worldwide and its franchisees will provide support and competitive advantages to our other brands.
| Whenever Hilton Worldwide or a franchisee considers new opportunities for growth and distribution within our Hilton Worldwide Hotels, together we should adhere to the following process and principles: |
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We will proactively communicate with each other regarding new applications that are received and, as a courtesy, will notify existing franchisees within appropriate and reasonable geographic/market proximity of the location of potential new projects within Hilton Worldwide.
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Existing franchisees within the same-brand extension will have the opportunity to submit information that may be relevant to our evaluation of the project, such as market trends, competitive data and common demand generators. |
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We will review and consider every application for new development based on its individual merits. The decision-making process will include a review of factors unique to the market sector in question, e.g., market dynamics, the brand’s performance in similar markets, individual hotel performance (such as financial, quality, and customer satisfaction), and existing and future market potential, for example, recent and/or documented new room-supply additions or changes in sources of demand. |
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“Worldwide, Hilton is one of the most recognized brands of any kind. It simply but universally means ‘hotel.’ To MeriStar, Hilton means many things: a strong family of brands that drives results, brand integrity driven by a powerful reservations system, a great guest rewards program and a talented corporate team.” –Bruce Wiles, Chief Operating Officer of MeriStar Hospitality Corporation
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Doubletree Guest Suites Atlanta, owned by MeriStar Hospitality Corporation.
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If an application is approved and you enter into a license agreement, we will work together to review documents and provide guidance on brand standards in order to meet the construction start and opening dates listed in the license agreement. If unavoidable delays in either construction start or opening occur, we will work together to set new appropriate dates. However, we expect that you will minimize delays and, if delays occur or are anticipated, you will notify us as soon as possible. If delays are not avoided or minimized, or if they continue, we may charge a fee to continue the project or default and terminate the agreement
Market Awareness and Fairness
We are sensitive to the effect that a new, same-brand or brand-extension hotel may have in a market and will balance these market factors and proximity issues against the necessary growth of all of our brands for the long-term value to both Hilton Worldwide and its franchisees. We are committed to making the review and, when appropriate, market integration process as smooth as possible.
We will concentrate on the effects within the same-brand extension. We may occasionally consider potential cross-brand or cross-brand extension effects where circum-stances warrant, but it will not be the norm. We will focus on those issues that may, in our judgment, have a material adverse effect that could occur if an additional hotel were opened in the local competitive market that might reasonably be a significant competitor. In those situations which are more challenging, we will include an internal “second level” of review and discussion, based upon the long-term best interest of the system, including consider-ation of both existing and new hotels within the brand.
We will follow neither a universal trigger mechanism, nor a “blanket approval” process. Instead, we will consider factors such as whether potential material, adverse effect on an existing hotel is deemed to be a significant and continuing factor.
SPECIAL BENEFITS FOR
EXISTING OWNERS:
OWNER VIP PROGRAM
When you join Hilton Worldwide as an owner, you become an important member of the Hilton team. One way of showing our owners how much we value their loyalty and the confidence they’ve placed in our brands, is by offering them a special package of services and benefits includining
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Gold VIP membership status in our award-winning Hilton HHonors® hotel guest reward program.
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Owner Travel Program which offers discounted hotel rates for leisure travel at all owned, managed or franchised Hilton Worldwide properties.* |
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Franchise Development Awards Program that will allow our owners to be considered for special recognition based both on outstanding performance as well as new project/development efforts within Hilton Worldwide's Hotels. |
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Subject to availability. This program excludes all Hilton International properties.
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“We are proud to be a partner
with Hilton Worldwide. We consider our portfolio of Embassy Suites Hotels to be some of our finest in terms of brand, performance and quality.” – John Q. Hammons, Founder, Chairman & CEO of John Q. Hammons Industries
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Embassy Suites Hotel
Northwest Arkansas,
owned by John Q. Hammons
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