Winning Over Confidence Is Vital In Franchising And Management

To succeed in the franchise business, it is important to understand the psychology of the owners and win over their confidence, says Anil Madhok, managing director, Sarovar Park Plaza Hotels & Resorts Pvt Ltd

As the world moves towards becoming a global village, tremendous business opportunities continue to emerge. These opportunities demand a dynamic approach and are best addressed through constant evolution.

The concept of franchising and management are still comparatively recent in India. Unlike in the West, there are not many franchise brands to choose from in India.

What is required from a successful franchising and management company, is expertise, a performance-driven approach, flexibility and adaptability, as well as a sound foundation on time-tested values, principles, ethics, integrity and mutual respect between the owners and the management company, leading to a long-term partnership.

To succeed in the franchise business, it is important to understand the psychology of the owners, as it would call for constant interaction with the concerned party. Most hotel owners find it rather difficult to hand over their hotel’s entire operations and to the management company. The reasons being, most of the hotel owners are successful entrepreneurs in their own right. It is this success that drives them to set up hotels. If one were to tell them that they are not technically qualified to run their own businesses and should hand it over to a management company, - their invariable reaction would be a big No.

Once one understands owner psychology, one needs to approach the owners with abundant caution, while explaining to them the benefits they would draw by going in for a management and franchising arrangement. The owner must see a win-win situation to accept the concept. If he is not convinced that the fee he is likely to pay the management company would generate additional revenues and profits, it would not be a workable arrangement. The owners also need to understand that professional management would give them a much more superior quality hotel as the management company would maintain higher standards by virtue of the fact that they are able to attract better talent and they can bring the best business practices into the hotel.

Needless to say, companies need to be owner friendly, look at their concerns, their need for recognition and their desire to keep their fingers on the pulse. If one can achieve this, one could then take the first step into getting their properties. In addition, for franchising, you need to have a recognisable brand, domestic or international.

At all times management companies must remember that they need to win the confidence of owners and their actions would always be under a microscope. Management companies must maintain complete and total transparency in their dealings with owners and must set the highest standards of integrity. Confidence, once lost, is like a cracked mirror that can never be brought back to its original shine.

Once the above is understood, we then need to look at the formula for success in developing and growing franchising and management in hospitality. Every owner would look for the following:

• Technical support in design and planning.
• Operational support and training in all areas of the hotel, whether in Food & Beverage, Housekeeping, Systems, Engineering, Front Office, Training etc.
• Strong operating systems and cost control procedures with clear reporting systems to give owners confidence that their assets are being looked after well and that the systems are in place to safeguard their investment and returns.

Sales and marketing is the most vital part of any hotel management company. Until and unless the necessary infrastructure is built to provide support for filling up hotels there would be genuine dissatisfaction among owners. Every hotel needs a trans-India sales and marketing network. It is not cost effective for a single hotel to achieve it. Management companies must spare no expense in creating this and supporting the hotel to justify their own involvement. However, a strong sales set up will only result in higher sales and higher fees for the management company.

It is clear that besides having a good understanding of the owners, unless an organisation is prepared to heavily invest in highly trained manpower and technical skills, they will not be able to provide services committed to their hotels.

To succeed in this business, one must be prepared to face long gestation period. Profits cannot be accepted in the early years for, as a management company, all we are selling is know-how. One must build a very strong, credible management team to succeed on a long-term basis.