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Independent hotel or a franchise hotel

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Independent hotel or a franchise hotel

Category: Exemplification Essay

Subcategory: Management

Level: College

Pages: 1

Words: 275

Independent hotel or a franchise hotel
Food and beverages industries are very profitable only if is the setting and planning of the organisation are done well. Primarily, because food is a basic need that everyone needs to survive. Additionally, raw material such as agricultural products and seafood in this industry are cheaper. This is because they are locally processed, and the company does not incur importation cost. Therefore, this has caused a lot of competition in the Food and Beverages industries. Some businessmen have decided to operate their hotels while others prefer franchise system of the hotel.
Consequently, the advantage of operating an independent hotel is that decision-making process is fast. Secondly, you enjoy the profit alone unlike franchising where you need to pay for the branding fee. When operating an independent hotel you have an opportunity of setting a long-term goal in the business. Likewise, operating an independent hotel you enjoy the leadership and full control of the business. However, the disadvantage of operating an independent brand is that the industry is dominated by franchised hotel. Therefore, independent hotel operator needs to unique or have to work extra hard in marketing unlike in franchise. Secondly, independent hotel always faces difficulties in obtaining a loan, unlike franchise that have loan securities. Lastly, independent hotels have difficulties when they hope to expand to international boundaries, unlike franchise system.
Contrarily, the advantage of franchising hotel is as follow: it is easy to obtain a loan as a franchise than as an independent hotel. Marketing of a franchise hotel is fast and cheaper because every unit of the franchise chain serves as promotion component. It is easy to expand to international boundaries using a franchise than using an independent hotel system. On the other hand, the disadvantage of the franchise system is that you lose control of the business. Secondly, you cannot make long-term future goals of the business. Thirdly, the decision-making process is slow compared to an independent type of business. Lastly, the initial starting of franchise hotel requires a large amount of capital compared to an independent hotel.

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