Hotels and Other Franchises


A financial institution foreclosing on the property of a franchise must abide by the franchise agreements to stay in business.


“One of the first things you want to do, and the credit people are savvy on this if they’re well-trained, is to get a receiver in there to keep the franchise contract intact [and] keep the going concern business operational with advertising, which keeps the income flowing and increases the chances of a quick sale.”


Patricia Dennis, Zions Bancorp


The best approach for dealing with a franchise is to getting a receiver or someone else to run the business so it remains in compliance with the franchise contract while it’s in foreclosure or pending foreclosure. If the business does not abide by its franchise agreement, it can lose the right to advertise under the franchise name, which can have a dramatic impact on its market share. If the business ultimately closes, the property will become a target for theft or vandalism.


Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20