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Franchise knowledge: Best Western hotels and franchising

According to many reports in the media, the world’s largest hotel chain, Best Western, is referred to as a franchise company. However, according to the company itself, it is not a true franchisor. Whilst the Best Western system has some similarities with a franchise network, it actually uses an independent sales and network model.

Best Western hotels are bound to the hotel group by a service agreement which, besides allowing them to use the brand name, includes marketing, sales, training and PR activities for the hotels. Each Best Western hotel holds one share in the parent company of the Best Western hotels in the country in question, for example in Germany this is DEHAG Hotel Service AG. The DEHAG shareholders are only hotels which are associated with Best Western Hotels Deutschland GmbH. The shareholders decide whether new hotels can join the Best Western network. Furthermore, Best Western hotels are now being run by the company itself.

The Best Western parent company in the USA has a similar organization. However, Best Western there is responsible for granting master franchise licences for individual countries. Franchising only exists within Best Western on the level of master franchising, which creates a network of national Best Western hotels in each country via service contracts and a shareholding company.

In order to ensure all hotels maintain a certain standard, Best Western uses a quality assurance system. All hotels must fulfil 14 minimum standards. Should a hotel fail to do this and does not carry out the necessary improvements, then it is excluded from the chain. Worldwide there are around 4,200 Best Western hotels in more than 80 countries. In Germany and Luxemburg, for example, the company is looking to increase the number of hotels from the current 166 to 200 by 2010.

Best Western (D)

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