FRANCHISE AND REFERRAL GROUP

Franchising is simply a method of distribution whereby one entity that has developed a particular pattern or format for doing business. The franchiser usually provides a strong brand name, national and international central reservation system, management training programs, advanced technology, and central purchasing services.

Example :- Hilton, Marriott, IHG etc.

Referral groups consist of independent hotels, which have joined together for some common purpose. While each property in the referral system is same but there is no similarity in the quality of service and guest expectations. Hotels within this group refer their guests to other affiliated hotels. With this kind of an approach a hotel may gain a much greater level of exposure.

The one notable survivor of the referral chains, Best Western, offers the centralized purchasing and reservation systems of a franchise system but nominally remains member-owned.