1. Is It Fair?
So you bought a Hilton franchise because you believed that the Blackstone Group was a strong owner. Now, Blackstone has begun preparations for an initial public offering and has hired the Goldman Sachs Group, Bank of America's Merrill Lynch and Morgan Stanley to find appropriate buyers.
What recourse does a Hilton franchisee have? None at all. While the franchisee can't sell his hotel without Blackstone's approval, Blackstone can sell the entire Hilton Corporation without the approval of its more than 4000 franchisees: (consisting of Hilton, Embassy Suites Hotels, DoubleTree, Hampton Inn, Hilton Garden Inn, Conrad, Homewood Suites, Home2Suites). It is hard to understand that these franchisees have no power to affect this sale. After all, most franchises are independently owned and operated by franchisees who have substantial wealth and means. Many of them are large companies who can afford to hire the best attorneys when necessary.
Yet the peculiarities of the franchisee/franchisor relationship provides no fiduciary duty on the part of the franchise companies. This unfair arrangement is not by accident or random circumstance. It has been carefully cultivated over the past fifty years by savvy and well-heeled franchise companies. They have systematically paid for the election of franchise-friendly state legislators and defeat of those who are franchisee-friendly. No wonder that most state laws barely recognize "good faith and fair dealings" (GFFD) in franchise agreements.
At the same time, many of these pro-franchise company state legislators have imposed no requirements for GFFD when the franchisor wants to sell the company. Blackstone is free to act in its own self-interest without regard for the consequences on individual franchisees.
When you read about Blackstone's plans in the trade press, you'd never know that there are franchisees involved. They are unmentioned in the news stories.
2. After Two Years In The Making
My new book, "Built To Last: 100+ Year-Old Hotels East of the Mississippi" is in the final design process. It will be available by the end of October 2013. It is a paperback which tells the stories of 86 hotels (50 rooms or more) and each is illustrated with an antique postcard. It has a foreword by Joseph McInerney, (President and CEO Emeritus of the American Hotel and Lodging Association), preface, introduction, bibliography and index. It has been accepted by the American Hotel and Lodging Educational Institute for promotion, distribution and sale. If you would like to reserve an autographed copy, send a check for $24.00 ($19.95 plus $4.05 for postage and handling) to:
147-03 Jewel Avenue
Flushing, N.Y. 11367
Be sure to include your mailing address.
3. A Free Preview of My New Book: Willard InterContinental Hotel, Washington, D.C
3. A Free Preview of My New Book: Willard InterContinental Hotel, Washington, D.C.
American author Nathaniel Hawthorne observed in the 1860s that "the Willard Hotel more justly could be called the center of Washington than either the Capitol or the White House or the State Department." From 1847 when the enterprising Willard brothers, Henry and Edwin, first set up as innkeepers on the corner of 14th Street and Pennsylvania Avenue, the Willard has occupied a unique niche in the history of Washington and the nation. The site upon which the Willard stands was originally part of the farm of David Burnes. In 1816, John Tayloe built a row of six two-story-and-attic houses as an investment. By 1818, the corner was being used as a hotel. In 1847 Benjamin Ogle Tayloe leased the establishment to Henry A. Willard and his brother, Edwin who was replaced by his brother Joseph C. Willard in 1849. In 1853, the brothers purchased the entire row of houses from Tayloe's heirs, uniting the buildings architecturally in a major remodeling. In 1858, the Willards expanded again, purchasing the mansion of Col. James Kearney on the southwest corner of 14th and F Streets which they demolished and built a six-story addition to the hotel. Next, an adjoining Presbyterian Church on F Street was acquired and converted to an auditorium known as Willard Hall.
At the beginning of the twentieth century, a new Willard Hotel was built by the George A. Fuller Company to the designs of the famous architect Henry Janeway Hardenbergh. In 1922, a major fire caused the evacuation by Vice President Calvin Coolidge, several U.S. Senators, composer John Philip Sousa, movie producer Adolph Zukor and other attendees at the annual Guidiron dinner.
Presidents Taylor, Fillmore, Pierce, Buchanan, Lincoln, Grant, Taft, Wilson, Coolidge and Harding stayed at the Willard. Other notable guests have included Charles Dickens, Buffalo Bill, David Lloyd George, P.T. Barnum and countless others. Walt Whitman included the Willard in his verses and Mark Twain wrote two books there in the early 1900s. It was Vice President Thomas R. Marshall, annoyed at the Willard's high prices, who there coined the phrase "What this country needs is a good 5-cent cigar." Situated just two blocks from the White House, the hotel is replete with the ghosts of the famous and powerful. It was at the Willard that Julia Ward Howe composed "The Battle Hymn of the Republic." Gen. Ulysses S. Grant held court in the lobby and Abraham Lincoln borrowed house slippers from its proprietor. Mark Twain, Charles Dickens, Nathaniel Hawthorne and Jenny Lind were all part of the parade of celebrated Willard guests. Even the uniquely political term "lobbyist" is said to have been coined at the Willard to describe those 19th-century special-interest promoters who cornered politicians in the opulent Willard lobby.
The Willard sat vacant and in danger of demolition until 1986 when it was restored to its former glory. A $73 million restoration project was carefully planned by the National Park Service to recreate the hotel as historically accurate as possible. Sixteen layers of paint were scraped from the woodwork to ascertain the hotel's original 1904 colors.
New York Times architecture critic Paul Goldberger wrote on September 22, 1986:
Most restorations of venerable buildings fall into one of two categories; They are either attempts to recreate as faithfully as possible what once was, or they are inventive interpretations that use the original architecture as a jumping-off point.
The newly rehabilitated Willard Hotel is both. Half of this project involves the respectful restoration of Washington's greatest hotel building, a distinguished Beaux-Arts structure by Henry Hardenbergh that had been derelict since 1968, a victim of the decline of its neighborhood, a few blocks east of the White House. The other half is an exuberantly conceived, brand new addition containing offices, shops, public plaza and a new ballroom for the hotel.
4. Quote of the Month
"The mutual confidence on which all else depends can be maintained only by an open mind and a brave reliance upon free discussion."
Judge Learned Hand
Logos, product and company names mentioned are the property of their respective owners.