AFM Franchise Division to Open 7 New Hotels in September- 117 Open/Executed Franchised Locations Now in Canada

TORONTO, ON (September 24) – AFM Hospitality Corporation (TSX:AFM) announced today the company expects to open seven new franchised locations in Canada during September.

AFM Hospitality According to Glen A. Blake, President & CEO/Franchise Division of AFM Hospitality, “the seven new openings in September will result in 117 open and/or executed franchise agreements for locations throughout Canada, representing more than 9,600 guest rooms. This continues our record-setting growth from the first half of the year, where we saw a dramatic 55 percent increase in new franchise applications over the same period last year.”

AFM Hospitality is the parent company of ten master hotel franchisors in Canada. The new hotel openings in September include …

• Knights Inn Morrisburg, ON – the 20th Knights Inn in Canada
• Villager Lodge Peterborough, ON – the 4th Villager Lodge in Canada
• Villager Premier Niagara Falls, ON – the 5th Villager Lodge in Canada
• Howard Johnson Woodstock NB -- the 58th Howard Johnson in Canada
• Howard Johnson Edmonton AB – the 59th Howard Johnson in Canada
• Howard Johnson Swift Current, SK– the 60th Howard Johnson in Canada
• Howard Johnson Yorkton, SK – the 61st Howard Johnson in Canada

Mr. Blake was exuberant in providing company results. “We are not only setting a record for new openings,” he exclaimed, “but in the past week we’ve announced the groundbreaking of the very first La Quinta Inn to be built in Canada, set for October 9 in British Columbia, the reflagging of the largest hotel at Toronto’s Pearson International Airport to our Park Plaza brand, the continued steady growth of Howard Johnson in Saskatchewan and our expansion of the Aston brand in Canada through new construction projects in Summerland and Osooyos. It is our belief that these events indicate the anticipated recovery in the Canadian hotel industry is well underway.”

Rebound in Multiple Segments, Geographic Diversity
The combination of factors has raised the optimism levels of many in the hotel industry, according to Lawrence P. Horwitz, Chairman & CEO of AFM Hospitality Corporation. “What’s really exciting to me is the convergence of many different types of activity now taking place, and the geographic diversity of those events,” he explained. “We’re seeing increased conversions to franchised brands, new hotel development, and hotel repositionings cutting across all market segments – from economy lodging with the growth of the Knights Inn brand in Ontario; to midscale strength with the increasing expansion of Howard Johnson locations in New Brunswick, Saskatchewan and Alberta; to the reflagging of the upscale corporate-oriented 524-room Carlton Place Hotel in Toronto; as well as the entry of the La Quinta brand with new construction in British Columbia.”

Alternatives for Hotel Owners
Hotel owners and developers are seeking a sense of “insurance” to support their investments, added Mr. Horwitz. “Clearly, hotel owners and developers are seeking ways to optimize and enhance their investments,” he said, “and they’re recognizing the value inherent in associating with established hotel brands that can provide immediate awareness and recognition of the hotel’s value proposition and positioning within the marketplace.

“Hotel owners are taking notice of the value in the brands we represent,” he said. “Despite the challenges faced earlier this year in the Canadian travel and hospitality environments, we are proud of the growth we have achieved throughout the entire year, as well as in what we anticipate will be the best month in our history for new hotel openings.

“Our tremendous growth is due in part to the ability of our Franchise division to provide our customers, the franchisees, with more alternatives and better service than any other hotel franchisor in Canada,” Mr. Horwitz continued. “With a variety of brands ranging throughout the economy, middle and upscale market segments, our customers have the option of finding the right brand for their product and the market they serve.”

Hotel Brands Equal Added Value
Mr. Horwitz explained that making a brand decision in the hotel industry represents a long, careful and well thought out process. “Our customers are selecting a brand for the multi-million dollar investment they’ve made in purchasing or developing a hotel, motel or resort,” he said. “We’re very pleased that our customers are recognizing the critical role a brand plays in the success of their hotels, and the importance of selecting a brand that can deliver business to their hotels through a variety of distribution channels – including central reservations systems, corporate and specialty market national sales efforts, Global Distribution Systems used by airlines and travel agents, and enhancing their ability to generate added volume and better rates through third-party Internet sites.”

AFM Hospitality is one of North America’s leading hotel companies, as well as one of its fastest growing. Its Franchise Division is one of the ten largest hotel franchisors in Canada, while its Management Division is one of the top 20 management companies in North America (both measures based on number of properties). In addition, its Interim Asset Management Division is a growing factor in receivership, management and consulting assignments in the United States, having handled nearly 500 assignments for 50 special servicers and lending institutions.

Continued Growth Anticipated
“With our strong team in place across Canada and the United States,” concluded Mr. Horwitz, “we anticipate continued growth in each of our Divisions during the months to
come, and we look forward to continuing to create value for our customers and investors.”

About AFM Hospitality Corporation
Through its subsidiaries, AFM Hospitality Corporation owns AFM Preferred Alliance Group Inc., AFM Asset Management Inc., AFM Hospitality (USA) Corporation, Northwest Lodging International (USA) Inc., Northwest Lodging International (Canada) Inc., AFM Asset Management Services, Inc., Trigild International, Inc., Special Asset Services, Inc. and
Staffing Services International, Inc. It is the exclusive Canadian Master Franchisor for Aston, Best Inns, Hawthorn Suites, Howard Johnson, Knights Inn, La Quinta, Park Plaza, Park Inn, Traveller’s Inn and Villager Lodge. AFM Hospitality Corporation operates or has open and/or executed franchise and management agreements with more than 250 hotels, restaurants and other nationally franchised service businesses throughout North America. The company’s focus is to increase the number of hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements, provide valuable resources and hospitality experience to help hotel owners grow their business, and acquire
other franchise businesses related to the hospitality industry, while making available property management services. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSX:AFM)

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