AAHOA EXPRESSED CONCERNS about unfair franchising practices to the Federal Trade Commission in response to their request for public comment on franchise agreements and business practices. According to AAHOA, the FTC has a critical role in regulation of the franchise industry, including ensuring adequate protections are in place and that franchisers are operating in compliance with the FTC’s legal requirements – both as they currently exist and are apt for modernization.
“In identifying an array of problematic, unfair practices and provisions within hospitality franchising, AAHOA aspires to advance the interests of its franchisee members and advocate for both enforcement and reform,” states AAHOA’s letter to the FTC.
In response to reports of “unfair and deceptive practices” harming franchisees, the FTC began a process in March to gather comments from business owners regarding the disclosure and contractual terms of franchise relationships, covering their extent, application, and impact. AAHOA’s response, driven by more than a year of member advocacy, builds on the momentum for sustainable franchising practices, AAHOA said.
“The association’s submission reflects at least 69 documented contacts with hotel brands and their representatives since March 2022,” AAHOA said.
“We look forward to the FTC’s anticipated efforts to identify and rein in certain practices of the hospitality franchisers that take advantage of their extensive market power to the detriment of our members,” said Bharat Patel, chairman of AAHOA. “AAHOA members are ready and willing to assist the FTC in its work to ensure fairness and transparency are hallmarks of the franchise industry.”
In the latest edition of Asian Hospitality’s Leadership series, AAHOA’s former and new chairmen emphasized the association’s commitment to serving the needs of its members as its primary purpose. AAHOA members, who own 60 percent of U.S. hotels, contribute approximately $368.4 billion in annual economic output, equivalent to around 1.7 percent of the U.S. GDP, according to Oxford Economics.
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