Evaluating a Hotel Franchise Agreement

Episode Transcript

Ryan Rivett: We have some true owner-operators, people who are there in their hotel every day or hotels on a rotation throughout the week, and they actively participate in day-to-day management down to the small details from an operations perspective. Those people are fantastic at the business. I absolutely love having that element inside of a relationship with a franchisee, because you just know that the quality and the consistency and the guest experience are going to be as good as they can be.

Robin Trimingham: They’re deeply vested.

Robin Trimingham: Welcome to The Innovative Hotelier podcast by HOTELS magazine, with weekly, thought-provoking discussions with the world’s leading hotel and hospitality innovators.

Robin Trimingham: Welcome to the Innovative Hotelier, brought to you by HOTELS Magazine. I’m your host, Robin Trimingham. If there’s one consistent mantra coming out of the hospitality investment world this year, it’s “Put your money into extended stay”. From individual investors to private equity to public companies, everyone is trying to get into the space. But as with every niche within hospitality, you don’t know what you don’t know, as the saying goes. So if you want to learn some of the nuances of a hotel franchise agreement, this is the episode for you. Today we’re going to look at how a franchisee franchisor relationship works, the basic components of a franchise agreement, what some of the commonly contested negotiating points are between franchisee and franchisor, and how becoming a franchisee typically does and does not make sense for my guest today. Ryan Rivett is co-founder and CEO of My Place Hotels, and he’s here to offer his perspective regarding typical components of a franchise relationship and why, for some, now might be the ideal time to join a franchise. Join me now for my conversation with Ryan.

Robin Trimingham: FOH is a global food service and hospitality company that manufactures smart commercial-grade solutions. Headquartered in Miami, the company designs and manufactures all their restaurant and hotel products. They have showrooms and distribution centers located throughout the globe, and their products are always in stock and ready to ship from any of their distribution centers worldwide.

Robin Trimingham: Welcome, Ryan. It’s great to get a chance to chat with you today.

Ryan Rivett: Thanks, Robin. I’m really happy to have the time to visit with you too.

Robin Trimingham: Well, I have to say I was quite intrigued by your family background, but for the benefit of our viewers who might be not quite familiar with you or your family, can you just give us, like, a very brief glimpse into how your family got going in the hotel business, and what inspired you personally to carry this on by starting My Place Hotels?

Ryan Rivett: Sure, it’s a story that I love telling, and I’ve gotten pretty good at abbreviating the parts that get into detail over the years. But business in general and hospitality specifically started in my bloodline in 1973. My grandfather, who was in the banking and insurance world at the time here in Aberdeen, South Dakota, joined forces with an attorney who was very entrepreneurial-focused to start a franchise company. They started by building one hotel here in Aberdeen, and that company became Super 8 Motels. They grew that business up until 1993 when the franchise company was sold to what is Wyndham today. Throughout that period of time, the infrastructure around our company and inside of our organization here grew into a very vertical structure with organizing all facets of real estate development, operations and management, as well as construction and procurement and technology and so many other smaller aspects of the business into individual service companies that are utilized in the process of taking a vision to build a hotel in one place and operate it successfully and make it a successful investment. So we’ve continued beyond 1993 when Super8 became someone else’s company. We’ve continued in the hotel industry as developers, owners, operators, contractors, and in 2012, we began My Place Hotels as a second entry into the franchise world and have had a great time over the last just over ten years now in the business. I am the third generation in my family since business and hospitality became a focal point and the second generation who’s been actively involved in the business.

Ryan Rivett: So, for me, I really enjoyed experiencing all of the things that surrounded the Super 8 company as I was growing up. I was able to spend time in the office and I knew a lot of company people and of course Christmas parties and company picnics and conventions and all of the things I got a chance to experience as the only grandchild for the majority of that period of time and the older generation. So, it was a very good opportunity for me to get acclimated. And there are some stories that go around today of Ryan coming into the office and buying franchises when he was seven and eight years old, and I’ve had the opportunity in My Place to now work with some people who were working in the Super8 company back then. So a lot of things have come full circle, and we’ve had a great time in taking the fundamentals and the successes realized in the past and carrying them forward to today’s hotel business. So for me, getting into the business was a predetermination. Not that I didn’t consider other aspects of entrepreneurship or career, but at the same time, it really was never a serious consideration. It was always I was excited to be able to get in and do what I observed being done as a kid, and I have never once looked back, so I really enjoyed it.

Robin Trimingham: Being part of Super 8, I mean, that’s quite a family legacy. We get listeners from all over the world here, as far away as Australia, so maybe not everybody has heard of this brand, but if you’re from North America, it’s the quintessential, I’m going to say clean, good, roadside motel. I’m honored, actually, to meet you and to see what you’re doing these days. Tell me, though, because the word franchise, that can mean different things to different people and completely different things depending on what industry we’re talking about here. When you talk about a hotel franchise, what is your definition then, and how would you say that differs from what I’m going to call a hotel management agreement?

Ryan Rivett: Sure. There’s one word that comes to mind when I’m asked what a hotel franchise relationship is, and that’s partnership. That’s what I’ve learned it to be, and what the utmost importance of a franchise relationship is between the franchisor and franchisee. As we look at franchising, we understand it to be an operating model, a set of standards and guidelines, and a system of supports to carry a hotel operator, investor, owner, all of the above through the entire horizon of an investment in the hotel business from insight, support and collaboration in the development process, through the construction process and into the whole horizon of operations. For us, the genesis is the concept of, hey, we’ve been in this business for a long time and we understand all of the different mechanics about it, and there are things that we see that we could do to improve the outcomes for ourselves as owners, operators, developers, contractors. If we can create those not on an ad hoc basis or on a it just works for our platform but create those on a repeatable platform that can be delivered to others. We have a franchise. That’s the beginning of it. From there, then it becomes our responsibility to maintain the integrity of those things that we created and to clearly and appropriately guide franchisees through that value proposition and those standards, and really create the guardrails that protect value for them from others who may enter and for us from others who may enter.

Ryan Rivett: And I think that’s always a challenge is to have everybody understand that. Hey, listen, while you may be a great hotel owner, operator, developer, manager, and you have your own certain way of doing things, your way of doing things in certain circumstances could be detrimental to the hotel operator. That’s ten miles or 20 miles or 100 miles down the road, who’s also associated with the same brand or the same marketing program from a guest perspective. So we have to maintain an overview of the value proposition and the fiduciary responsibility for everyone involved. There’s never a time where I can say, well, yeah, this works for him. So we’re going to let him do it, but nobody else can do that or, hey, we’re going to create this just for this one place. Everything we do has to be created with everyone in mind, and that’s a big challenge. That’s something that is somewhat counter to the way that businesses are operated in many respects. So that’s why franchising is so much different and I think can be so valuable, but also can create challenge relationships if it’s done wrong.

Robin Trimingham: I think you’re in a very interesting position. If I understood what I read about you guys correctly here, you have this enormous wealth of experience because of coming up through Super 8. And yet compared to, say, McDonald’s, you’re not an enormous franchise operation at the moment. But understand you’re in growth mode, so you’re big and small all at the same time, if I can say it that way, which to my mind would make you agile in that if you discover that something needs to be course corrected, you can put that through the franchise organization relatively swiftly because you don’t have to roll it out in, I don’t know how many million locations all at once. If you’re never been involved in a franchise relationship, can you talk to us about some of the basic franchisee responsibilities and some of the franchisor responsibilities and financial obligations of each party?

Ryan Rivett: Sure. The obligations on both sides are very well. Laid out in the franchise agreements and so on. And so I won’t try to go into the detail of those things, but we want.

Robin Trimingham: To keep the listeners awake.

Ryan Rivett: Right? From a standpoint of practicality and execution and relationship, the responsibility of both franchisee and franchisor can really be paralleled to manufacturer and consumer. It’s not a whole lot different. So if I manufacture a product and sell it to you for a certain purpose, your responsibility is to determine that you like that product and want to use it for the purpose that it was intended, and then to purchase it, and then to actually go out and use it for the purpose it was intended in order to gain the value that you saw, which caused you to purchase it in the first place. And I, as the manufacturer, have to produce a quality product that works as intended and described, and I have to provide the ongoing support that one deals with. Any issues that may come up with an individual product and corrections or collaboration on improvements to those things with the customer, but also on maintaining an ability and a platform for growth that continues to increase the value. The franchise system works best while it’s still growing. It needs to always be growing because as the network is increasing, the strength in numbers increases as well. Everybody benefits from the collective inside of a franchise network.

Ryan Rivett: So for us, creating the physical plant, creating the operating standards and the design standards, and then creating the marketing and sales and revenue management platforms that surround it, that we have learned through hands-on experience as well as different elements of learning in the process of creating and trial and error and proof of concept, initially and ongoing proof of concept. And I think that’s important for a product, is that I don’t think you ever leave proof of concept if you’re doing your job well. And that’s such a big component of a franchisor’s responsibility is to always be listening to their users, their franchisees, and then the operators underneath those franchisees to say, hey, what’s working and what’s not, and how do we address that? And to your point, we are at 115 franchises now. We’re very small relative to our biggest competitors, and we are nimble. But as I look back on the history of our administration, the hotel franchising, and I use our very loosely because I’m the young guy in the group, but I understand the concepts and the fundamentals, and we have people that were part of that are still part of my place today on a daily basis, and are able to carry those actual experiences forward, which has been immensely helpful.

Ryan Rivett: Super 8 at 1100 properties in the chain in 1993 was very nimble and flexible, also primarily because one of the main focuses that they had and what we have today was to stay close to their operators. It was to stay close to the properties. It was to have open ears and open eyes to what was actually going on in the field and to be able to make adjustments to what wasn’t working, improvements to what wasn’t working, and improvements on what was working. And we do the same today with what is working. And so when you come down to responsibility on both sides of the coin, beyond selling and purchasing a product and then utilizing it as intended and supporting what its use was intended to be, then both sides have to agree to communicate. And communication up to the franchise and down to the franchisee is so incredibly important for the value proposition to grow, for the network to grow, and for improvements to be the culture, to be constantly improving. So hopefully that summarizes and answers the question from my practical perspective, but that’s really how I see it on a daily basis.

Robin Trimingham: We’ve all just been through the big world event, otherwise known as the pandemic. Did you guys learn anything as a result of that experience that sort of made you rethink how you were doing parts of your relationship or operating with your franchisees?

Ryan Rivett: We did learn some things. I’m really happy to say that we very quickly were concerned about what we might be doing wrong as we, the world, plunged into those circumstances, and as we came out of them pretty quickly, we recognized, hey, we’re in the right spot, we’ve got the right product and the right model, and we’re targeting the right business and all of those things. So it provided such a huge reassurance for us. But then you’re constantly looking at, okay, where are the holes in my boat in a circumstance like that? Yeah. And we found that we needed to increase our communication with the franchisees. That was one big thing that we had while we were communicating. Well, what we found is we were relying on some of the support mechanisms. And systems of communication, reporting, etcetera, to be larger components of our ongoing dialogue with franchisees. And what we needed to do was to get more narrative back and forth. So pretty much immediately, I’m going to say beginning right away in May of 2020, we amplified our communications. It started from the top. I began a weekly update email to franchisees. Just a quick rundown of kind of a short state of the Union. Hey, here’s where we’re at. Here’s what we’re seeing across the chain. Here’s the things that we’re working on here are the different groups that we’re working with, whether it’s or local regional groups, to understand circumstances and areas of opportunity in terms of support financially or health-wise and precautionarily. So that became really valuable. What I recognized very quickly was that stimulated more responses than we had been getting prior. It also stimulated more direct and one one-on-one voice communications between my department heads and various people in the companies where email had been relied upon more, and just simple automated reports going out and us knowing that they received them were enough. So I think that was probably the most striking lesson that we learned immediately in the process was we really benefit from communication. And I think through that process, what we were able to do was mitigate the chaos and the uncertainty along with those circumstances.

Robin Trimingham: It’s interesting to listen to the kinds of things that you’re saying. You were talking a little while ago about marketing. Let’s use that as a little bit of an example between marketing and what I’m going to call social media and a franchisee-franchisor relationship, who’s responsible for what.

Ryan Rivett: The way we see it is that the franchisor is responsible for creating the marketing narrative and creating the visual kei keynotes and cues that can be utilized in all different forms of marketing. And so we have a graphic design department here. It’s something that we started with right away, because we recognized that all of the marketing materials we needed to put out, both from a franchise-facing perspective and a consumer-facing perspective. We needed to get them out quickly because our brand was changing. We needed to get them out with uniformity because we wanted people to know that we are the same everywhere. And so very quickly hired a graphic design person. That led to a second and a third and a fourth. And so our graphic design group is pretty large here. So we create the overall narrative. We are the the pack leader in terms of creating marketing content, both on social, in print and in other facets of digital. From there, though, the opportunity and the responsibility lies with the franchisee, their management company, or their or their management team on property, depending on how they’re structured to take what we’ve laid out as a lead and say, hey, this works really well for me, but add in there the local elements that I can now take and go into my community with.

Ryan Rivett: So national advertising and taking the lead in terms of marketing on an on-brand and above-brand basis is definitely our responsibility. And we’re listening to franchisees, we’re listening to guests relative to who they are or what they like, what they need, and then responding to that and building that relationship for franchisees and their operating teams. Their responsibility is really that local marketing element. They know their communities better than we ever will. They understand the product inside of their community and how it functions better than we ever will. And so it’s their obligation then to say, hey, you don’t have anything out there that fits my community, so go create something for me to use. And here’s some key insights. And we have a process for that that works really well within our design team, that we’re creating local advertising for our franchisees on a daily basis here and pushing that back out, which also saves them some time and effort in going down to the local graphic design shop and trying to work with them to put together an advertising flyer for the upcoming high school hockey season. Something like that.

Robin Trimingham: Established in 2002, is a woman-owned global food service and hospitality company that manufactures smart, savvy commercial grade products including plateware, drinkware, flatware, hotel amenities and more. Driven by innovation, FOH Is dedicated to delivering that wow experience that restaurants and hotels crave, all while maintaining a competitive price. All products are fully customizable, and many are also created using sustainable, eco-friendly materials such as straws and plates made from biodegradable paper and wood, and PVC-free drinkware. F.o.h. Has two established brands. Front of the house focused on tabletop and buffet solutions. And room 260, which offers hotel products. Check out their collections today at fohworldwide.com.

Robin Trimingham: That’s very interesting because that must help with brand consistency as well. Talk to me in general terms from your own perspective, what are some of the big benefits to an existing property that’s maybe lost a little bit of its market share? Maybe it’s looking a little tired and they’re thinking about joining a franchise program.

Ryan Rivett: So I should say as a preface for my place, we don’t do any conversions. It’s a new construction brand. In 2020, as we saw the world changing, we decided to dive in a little bit further to a concept that has been around for quite a while within our group of how are we going to eventually diversify My Place and the network that’s growing surrounding my place. And that’s obviously with a conversion brand of some sort. So Trend Hotels and Suites by My Place was launched at that time and over, as we all know, in 2020 and 21 and 22 and continuing in 23, circumstances and environments are very chaotic and still. And we’re we’re still working to get the first group of trend hotels open. So to answer your question, I’ll focus on trend hotels and suites in my place and our objectives there. The value proposition in large part is that over the operating life of a hotel, you have the necessity to continue to grow your customer base. I think in most places, there’s always going to be that base business that enters the market frequently and you can rely on and maybe you as an operator have built, have built rapport with and continue to do business with this same demographic, or maybe that’s the same group of companies, etcetera. And so those will always be there. But how do you continue to expand the customer base as your market changes, as the traveling demographics change and the reasons for stays change, how do you keep them focused in on one hotel? Some of that is with updating the physical plant and things. Other elements of that are with changing up the marketing a little bit, offering some ancillary offerings that go beyond just or above brand or beyond just the standard offerings.

Ryan Rivett: So what we’ve seen with the groups that we’re working with today on trend is that one, they’re looking for an opportunity to transfer from their current franchise or out of an independent status and into a franchise to a get the support of a franchise, be they like the opportunity to be in with a smaller group where they may not just be a number or one of many inside of that brand in the same market. And so some of those are the advantages specifically for my place and trend hotels. But generally speaking, I think this is a these are considerations that lie with everyone. The other is to reduce franchise costs. Often oftentimes as a brand grows, the franchise costs get larger and the value supported by those franchise costs may diminish. If you have large saturation within that same brand or parent company and in one market. So those are things that definitely have to be managed on both sides of the relationship as a franchise grows. So if you’re looking at it and saying, I need some fresh perspective, I need some fresh support, I need to reduce my operating costs a bit, and I can’t afford to spend millions of dollars on converting my hotel. So I’m looking for an option that allows me to spend hundreds of thousands, maybe on converting my hotel. And it really comes down to a fresh start with a fresh partnership that may come all the way back around to increasing that demand base for that individual hotel and softening the impacts of operating an older hotel.

Robin Trimingham: Okay, that makes sense. So what would you say in a franchise agreement is somewhat negotiable? And what is take it or leave it, for lack of a better way to say it.

Ryan Rivett: Yeah, you’re right, that is a matter of perspective because I’ve heard all manner of things being negotiated and franchise agreements for us. We’ve been focused on maintaining the integrity of the terms that we put forth to begin with, because we saw them as reasonable and continue to see them as reasonable, and at such point that I can’t explain some terms that we work off of as being reasonable, or wouldn’t be willing to inflict it on myself. That’s when we need to change it. That said, there’s always some level of negotiation or modification, even maybe not even being negotiation on some element of it, whether it’s the area of protection or a larger area of protection for a shorter window of time in the franchise agreement that allows the operator an opportunity to see their community grow without having any internal competition or any threat of internal competition. That seems to be the most consistent element that we’re working through, collaborating with a franchisee on. And little elements of negotiation go into that because we have to look at it as a franchisor and say, hey, I need to keep my system growing. So if I. Make this area too wide, I choke off potential growth, but also have to say I need every unit inside of our system to be successful.

Ryan Rivett: So if I make that area too narrow, I may choke off the opportunity for success and the longevity of success in any one unit. So it really is a managed situation that needs to be very mutually thought out and determined. We see some negotiations relative to personal guarantees and some elements of the guarantee and the commitment that the franchisee is making. Sometimes there’s multiple people inside of the franchise group inside of the entity that’s buying it. That provisions fit for the key people, but they don’t necessarily fit for a limited investor or a minority partner. So I think those are the two main things that we see negotiated. Beyond that, there may be elements of rates and terms or ramp-up periods on franchise fees and royalties that can come into play. And again, every franchisee and every market has its nuances and the different entry points. And so all of those things really have to be considered when you’re talking about a 20, in our case, 20-year franchise relationship and a commitment of that long.

Robin Trimingham: You’re making me think of another question I’d love to ask, because quite often on this program, we talk about data. When you’re talking about, I’m going to say the market size of a unit. What kind of research or factors are you typically considering when you’re trying to work that out?

Ryan Rivett: Hospitality industry-specific data is so important to us that we definitely heavily rely on Smith Travel or Caliber Labs and others to give us provide us insights and data on specifically how the overall hospitality market is performing, what the trends and the longevity of the different metrics are, who the customer bases are and the different primary segments in that area. But it’s very important to also look at community data and economic data outside of the hospitality industry. So I’d say in a lot of situations, we and what I see from franchisees and others that come in with a concept of building in a certain place is start with that hospitality-specific data, and then work our way out from there into the community and into the economic environment in that community, in that trade area and in that state, region, etcetera, because we always have to know where our demand generators are, who’s most likely to generate hotel room nights for this location, what are our demand facilitators? What reasons would cause those specific demand generators to choose our hotel specifically out of the greater market or the smaller competitive set that we’re in, whether it be restaurants or entertainment venues or conveniences in the community or primary transit lines, etcetera? So we like to look at those metrics and say, how is population growing? Who is the population growing by? What are the forecasts for this community that tell us what this community should look like three years, five years, ten years from now? How consistent has the community been before now in terms of population, in terms of workforce participation and economic growth? Those are all really important factors and there are so many more. Every market’s got the uniqueness of how it runs and how it sustains. So we start small and work our way out from there.

Robin Trimingham: That’s a very good overview of what I realized was an incredibly complex question. We could have had a whole discussion just about that. I’m sure in your opinion if somebody is trying to decide which franchisor to go with, because sometimes as an onboarding franchisee, you’ve got options, would you say that are like any really red flags in an agreement that somebody who’s a newbie to all this should be keeping an eye out for?

Ryan Rivett: I’m not sure that I could speak to red flags in the agreement itself. I think franchise agreements are pretty well governed through the franchise registration process, whether it’s with the FTC or with the state or states that they’re registered in. What I would say is really in the relationship and the performance data, what I’ve seen in the past and has stood out to me as not being completely transparent or a good indication of what your relationship may look like down the road is when a company has 200 hotels in its system, and it’s reporting financial performance data through its agreements, that pertains to 20% of those hotels. So the franchisee is using that information to characterize their expectations for how it could possibly perform as they decide to go forward. And having a bigger window into how it should work is extremely important. It’s important to understand the potential downside and the potential potential upside, as well as the middle-of-the-road benchmark that everyone would hope to at least achieve. So that’s one area that I would look closely at in acquiring a franchise. I don’t expect to be buying any franchises outside of my place in the hotel industry, but maybe in the restaurant business or in other businesses. We’re entrepreneurs. And while hospitality is our primary focus, everybody needs some diversity. And so that’s something that I would definitely look for, whether it was in any sort of franchise relationship. The other is how the communication style is and where the emphasis of communications is with the representatives you’re working with, whether it’s an executive in the company or it’s part of their franchise development teams. If the focus is on what you’re going to do for me, as opposed to, here’s what we will do for you.

Robin Trimingham: Good point.

Ryan Rivett: That’s cause for pause, at least, and redirected questions and maybe just a little bit of withholding to see where that goes. But it’s extremely important to have a balanced conversation on. Here’s what I expect, and here’s what you will actually do on both sides because the franchise relationship does not work without both sides firing on all cylinders.

Robin Trimingham: Well, you’re so right about that. You mentioned restaurant franchises a moment ago, and that one is just fraught with danger because you wouldn’t believe how many people out there believe that because they like to eat and they’ve eaten in restaurants. Therefore, they would be well suited to own a franchise, especially if they have a little money they’re looking to invest. It’s a very specialized field. You got to know what you’re getting into. What about hotel franchises? Is there any particular kind of person or organization that would be well suited to owning a hotel franchise? And is there any person or entity who would not be as well suited to this sort of a relationship?

Ryan Rivett: One of the biggest things that I marvel at in terms of our landscape of franchisees, is the diversity of their inroads to hospitality and their methods of approaching investment and operations. But I guess we have some true owner-operators, people who are there in their hotel every day or hotels on a rotation throughout the week, and they actively participate in day-to-day management, down to the small details in their hotels. And from an operations perspective, those people are fantastic at the business. I absolutely love having that element inside of a relationship with a franchisee, because you just know that the quality and the consistency and the guest experience are going to be as good as they can be.

Robin Trimingham: They’re deeply vested.

Ryan Rivett: Yeah, absolutely. At times they have challenges with the development and construction aspects. So there needs to be a counterbalance there. I’d say the same thing. We have franchisees who are primary business or background has been in construction or development, and they really do a great job of pulling a project together quickly and maintaining a capital budget. That makes a lot of sense. But they get to operations and they may be handed off to a third-party management company or a family member or something, and they struggle throughout the operations period on a lot of the elements that the other does not. And then the third dynamic is the pure investment organization, who is capitalizing on a venture and relying on third parties for every aspect of the implementation and execution on it. And there are different challenges all the way through with that. And so there may not be one unique demographic or corporate dynamic that works best for hotels, from my experience. But I would say for people who aren’t interested or interested in valuing people, if. They’re more mechanical, and numbers and mechanics are what works best for them and what they understand and value the most. The hospitality business is not for you. Yeah, that’s.

Robin Trimingham: True.

Ryan Rivett: Because at every juncture from start dealing.

Robin Trimingham: With people.

Ryan Rivett: It’s people. Whereas other places you may be able to say, hey, we just focus on the mechanics and processes that we have, and we let somebody else deal with the people in the phase that people are relevant. Here, you just can’t get around it. And so I think in order to do well at hospitality, you really have to be able to value people.

Robin Trimingham: Gosh darn it. You’re absolutely right. We got a couple minutes left here. If you’re new to all of this, in your opinion, what are a couple of the key things that somebody should understand before joining a franchise?

Ryan Rivett: I think it’s really valuable to put together a list of expectations before you walk into a relationship. And franchise relationship is no different. What is my perception of what you’re going to do for me as a franchise, or to start within the middle and throughout the course of the process? What values do I see in the relationship? And that’s subtext is product, platform and support. And to really line those things up as the key components or the pillars of your fundamental approach to to the partnership and the ultimate operation that you’re going after. I think it’s extremely important to clarify those things because the fact that there are so many approaches and there are so many different dynamics inside of the hospitality business and each market and demographic that we serve and product under each brand and so on. You just you can really get bogged down in the marketing that you see and the ideals that come along with marketing that you really need to narrow it down specifically to. It’s me and and my group and what we see, understand and expect and communicate that out. Here, here are those things. Now tell me how you’re going to do that for me or how we should carry that forward. That’s definitely as a prerequisite for me. And I think that’s something that we try to incorporate into our discussions with franchisees on the initial approach.

Ryan Rivett: We have a process and a mandate here that every franchisee will come to our offices here in South Dakota for a discovery visit prior to purchasing their franchise. It’s extremely important for establishing the relationship and being able to actually have those conversations. Specifically, here are my expectations. Here’s my outlook, here’s my forecast, and what I hope to accomplish short-term, mid-term, and long-term. Being around the table, sharing a meal, getting to know one another is what stimulates that type of conversation and that mutual understanding. And it’s so important. During the pandemic period, we had a few instances where we weren’t able to do that, and we saw the negative impact of that. And interesting in some cases, it took us a little while to really get that relationship established because we missed that first initial touch point where we were able to sit around the table and really get to know one one another. So maybe that’s just us, or maybe that’s more people than just us or just how it should be, but we definitely think it’s how it should be. And I think that’s extremely important for every franchisee to consider before they move into a relationship.

Robin Trimingham: I’m going to ask you a closing question that I ask most of my guests. If you could give a message to everybody who comes across this broadcast, what would you tell them?

Ryan Rivett: I would say that the most rewarding parts of my day and the business that I’m in, and if you’re considering hospitality and therefore watching this podcast or you’re in it, maybe reconsider it. The most rewarding parts of my day and the biggest benefits that I see and the beneficiary of, or the successes of people developing, watching my team develop over the last ten years, seeing new people come into it and develop through it and then seeing how our brand changes every time a new franchisee comes into the system is extremely rewarding, and it makes the business and life a lot of fun. So we’re having fun doing that, and I guess I would just encourage everyone to look for those things, look for those opportunities. And again, it’s all people. So if you’re not looking for the opportunity through the people that you have or you’re around, you’re probably missing a lot of things.

Robin Trimingham: Excellent answer. And I think that’s a great place for us to stop. You’ve been watching The Innovative Hotelier. Join us again soon for more up-to-the-minute insights and information specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotelier podcast by HOTELS magazine. Join us again soon for more conversations with hospitality industry thought leaders.