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FRANCHISE HOTELS AND RESORTS TERMS - INDIA |
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DESCRIPTIONS |
DETAILS |
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| 1 |
Hotels |
INN, HOTEL, RESORT, SUITES, PLAZA HOTEL, GRAND
PLAZA HOTEL |
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| 2 |
Terms |
Minimum 5 years followed by option for an additional five years, each
option exercisable by mutual agreement. |
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| 3 |
Initial Fee |
US $500 Application Fee – one time |
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US $15,000 payable per hotel – one time - This fee will be charged only
once for the entire contract term. |
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The fees covers all costs and expenses in integrating the hotel into the franchise system, website,
distribution channels, brochures, connection and |
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integration into the key players of the global distribution systems,
online travel agencies, etc. and all other start-up expenses. |
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| 4 |
International Shared |
Monthly Royalty Fee: – US$10.00 per room / per month |
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Cost |
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Monthly Marketing Fee: - US$10.00 per room / per month |
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This is the regular fee to keep the hotel within the Franchise reservation and online system, upgrading the systems, and
worldwide marketing the |
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property through Franchise’s
exclusive channels. |
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| 5 |
Base Management Fee |
50 Rooms and less: 10% Management Fee Annual Gross Revenue of the Hotel |
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51 – 100 Rooms: 9%% Management Fee Annual Gross Revenue of the Hotel |
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100 Rooms and over: 8% Management Fee
Annual Gross Revenue of the Hotel |
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| 6 |
Incentive Management Fee |
Incentive Fee based on percentage of Gross Operating Profit
(GOP): |
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GOP 6% of GOP |
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Payable monthly. |
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By the end of the fiscal year and upon provision a final
Income Statement the yearly average Gross Operating |
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Income is computed and payment adjustment in either favour are
effected. |
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| 7 |
Global sales & |
Franchise Hotels & Resorts program includes Planning, development and implementation of
marketing strategies for the Hotel, including advertising |
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Marketing System |
promotions, publicity, sales, e-commerce and direct marketing; Access to
marketing programs developed or negotiated through the
Franchise System. |
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Contribution |
Franchise brand identity
and brand collaterals; |
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Direct sales activities on behalf of the Hotel in both the leisure and
business |
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market segments; |
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Inclusion in the Franchise
Hotels & Resorts worldwide directory and on the Franchise Hotels website |
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Select trade show coverage and other marketing activities,
administrative |
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costs and overhead related to the management of these programs. |
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| 8 |
FF&E Reserve |
FF&E Reserve |
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There shall be an FF&E Reserve Account opened in the Hotel’s name and
controlled by the owner/s and/or owner/s representatives established to |
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fund replacements and renewals of fixtures, furniture and equipment. This
fund is dedicated and to be spent on the Hotel to maintain it in a |
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competitive and leadership position and in accordance with Franchise Hotels & Resorts brand
standards. The amount to be reserved is equal to the |
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following percentages of the Hotel’s total revenue: |
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Year 1 – 2 : 2
% of total revenue |
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Year 3 : 3 % of total revenue |
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Year 4 onwards: 4
% of total revenue |
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This is a dedicated reserve to be set aside every month in the
owners account |
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| 9 |
Hotel Development |
To ensure the Hotel is developed and constructed to Franchise Hotel brand standards and has a successful opening and
start-up period, Franchise Hotels |
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Services Charge |
services are available and the fees will be discussed depending on the
scope of the project. |
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(HDSA) |
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| 10 |
Distribution |
Global Reservation Fee to be paid at the end of every month for automated
reservations (GDS and Internet) @ the rate of 7% of net room revenue per |
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Systems |
reservation, plus EUR $6.75 per transaction reservation (only
reservations generated through the Management Hotels GDS Reservation Channel
will be |
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&Reservation |
accounted.) This fee goes directly to the booking
agent of around 600,000 travel agents worldwide or booking agents of the
major airlines, car rental |
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Services Charges |
companies and over 1,700 worlds leading hotel booking internet
websites. |
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Franchise Hotels &
Resorts may increase the reservation fee and third party charges from time to
time to the extent the increase is reasonably |
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necessary to cover costs to the Reservations System. These fees are
consistent with Franchise Hotels’
current standard for this service. Increase |
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in fees will be notified 90 days in advance. |
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| 11 |
Marketing and |
In addition to the Marketing Contribution, the owner will pay all third
party charges assessed with respect to various programs that are
implemented |
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Brand Programs |
generally for Franchise branded hotels from time to time, respectively.
Some examples are frequent flyer programs, guest loyalty program, travel
agent |
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loyalty program, employee training programs, guest satisfaction programs
and employee satisfaction surveys. |
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| 12 |
Uniform System |
All Fees quoted in the Initial Proposal as well as in the Memorandum Of
Understanding and the Hotel Management Agreement are based on the |
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accounting guidelines, which, as of the date of this Initial Proposal is
the “Uniform System of Accounts for the Lodging Industry. |
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| 13 |
Taxes and Charges |
Tax Deducted at Source: Tax Deducted at Source (“TDS”) shall be deducted
from all fees and amounts payable by Owner to Manager. All Other Taxes |
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Fees and Charges: Other than TDS, Owner shall be responsible for all
taxes, fees and charges imposed on all fees and amounts payable by Owner
to |
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Manager, and shall pay the same without deduction from payments to
Manager. |
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Note: All Terms and
Condition are subject to Franchise Hotels & Resorts Approval and has a
validity of 60 days from the date of MOU |
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( Memorandum Of Understanding ) |
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Franchise Hotels & Resorts |
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California, USA
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