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Hotel Law Blog — Published by Hotel Lawyer Jim Butler & the Hotel Law Attorneys of the Global Hospitality Group® Hotel Law Blog Published By Global Hospitality Group® Navigation Home Hotel Law Blog 酒店法律博客 Hotel Law Blog About Us Resource Center Meet the Money® Contact Us About Jim Butler Hotel Law Blog Subscribe By RSS Latest Blog Posts BEFORE you sign that (nonbinding) letter of intent, think about this! October 23, 2020 Boutiques may be adapting faster than other hotel sectors, but still hurting September 15, 2020 Hotel Lawyer: Franchise & Management Disputes in a Covid crucible July 17, 2020 CMBS Special Servicing Roundtable for distressed hotel and retail projects July 13, 2020 Meet the Money® Online: Hotels and Information Security – Protecting Guests and the Bottom Line July 1, 2020 ADA Defense Lawyer: ADA requires hotels to describe accessibility on website June 30, 2020 ADA Defense Lawyer: ADA Website Litigation Update — serial plaintiff rebuffed June 29, 2020 CMBS Special Servicing FAQs Virtual Roundtable ~ July 8, 2020 June 25, 2020 MTM Online: Hotels & Information Security – Protecting Guests and the Bottom Line June 22, 2020 Meet the Money Online: State of the Hospitality Industry May 26, 2020 Top Blog Posts 1. The ADA Compliance and Defense Guide — free download 2. Hotel Lawyer on HMAs: “The shrinking terms of hotel management agreements” 3. Hotel Financing 2015: JMBM’s “preferred” EB-5 construction financing program for top developers and projects 4. The “new breed” of condominium hotels — Key to financing new hotel development? Selling condo hotels as “securities” under new SEC Rule 506(c) . . 5. Los Angeles is the new magnet for real estate investment 6. FAQs on “service animal” requirements of the ADA. What every hotelier needs to know. Why Uber was sued over service animals. 7. Why this may be the time to buy or sell a hotel management company 8. Hotel development & EB-5 financing: Why you don’t want to form your own regional center 9. Hotel Liability for Guest Information — What you need to know and how to avoid liability. 10. Hotel Franchise Lawyer: 8 things to negotiate in your next franchise agreement 11. Hotel Lawyer: The 5 questions every owner should ask before selecting a hotel brand 12. Hotel Franchise Lawyer: Hotel Franchise Agreements and the 5 biggest mistakes a hotel owner can make 13. Hotel Lawyer with insights on "How to get a great hotel operator" 14. The importance of Comfort Letters in financing franchised hotels 15. Hotel Lawyer: Something everyone buying or building a golf course should know . . . Hotel Law Topics ADA Compliance and Defense Ask the Hotel Lawyer™ Buying and Selling a Hotel Chinese Investment Condo Hotels Coronavirus Data Technology, Privacy & Security Disasters EB-5 Financing Force Majeure Green Hotels Hotel Development Hotel Finance − Hotel Debt & Hotel Equity Hotel Franchise & License Agreements Hotel Management Agreements Hotel Mixed-Use How to Terminate Hotel Management Agreements Innkeepers Law International Hotel Investment Labor & Employment Land Use & Entitlements Lifestyle Hotels Meet the Money® Outlook and Trends Resort Fee Litigation Restaurants Timeshare Workouts, Bankruptcies & Receiverships Search Blog Search for: Featured Articles Featured Articles Hotel Lawyers -- featured subjects and articles Meet the Money® 2014 ADA defense and compliance EB-5 financing Workouts, bankruptcies & receiverships Hotel Management Agreements Hotel Franchise & License Agreements Hotel industry trends This is Jim Butler , author of www.HotelLawBlog.com and hotel lawyer. Please contact me at Jim Butler at jbutler@jmbm.com or 310.201.3526 . Published on: October 23, 2020 BEFORE you sign that (nonbinding) letter of intent, think about this! By Jim Butler and the Global Hospitality Group® 23 October 2020 See how JMBM’s Global Hospitality Group® can help you. Click here for the latest articles on Hotel Management Agreements and Hotel Franchise & License Agreements , and download our HMA & Franchise Agreement Handbook (3rd ed) . One of the biggest mistakes owners and developers continue to make is negotiating a “nonbinding” term sheet on various hotel arrangements, such as hotel franchise and hotel management agreements. This can be a costly misstep for the reasons Bob Braun points out in this article on a classic but perennial problem. First Things First – The Letter of Intent in Hotel Agreements by Bob Braun, Hotel Lawyer Love at First Sight? How hotel developers and owners, on one hand, and hotel brands, on the other, meet and agree to brand a hotel or resort property is a complicated process. Sometimes developers or owners seek out a brand, and sometimes a brand will approach a potential owner. Either way, the developer/owner meets with a development executive from the brand, and the two parties see if they have enough in common to talk seriously about a long-term relationship. During those early stages, each is trying to demonstrate its resources, seriousness, and commitment to a long-term relationship of 20 years or more. They trade pro forma financials, introduce key personnel, and in pre-Covid days, wine and dine each other. Brands will research the background and business history of their potential franchisee, and owners will seek out other owners for references and their real-life experiences. Owners will study the performance of brands throughout the world, especially where the project is in a foreign locale. The process resembles a mating dance: owners are courting brands, and brands are courting owners. And most typically, owners declare the seriousness of their intentions with an application fee – a very large application fee. At that point, the brand and owner negotiate and enter into a non-binding letter of intent. The letter of intent makes it clear – the terms in the letter are nothing more than a good faith statement of the desire to move forward and discuss the details. Owners negotiate the basic terms in the letter of intent, and after seeing that the letter is, by its terms, not binding, they sign it, believing that they and the lawyers will have another chance to revisit those issues that might concern them. Reality Sets In Unfortunately, brands and managers don’t take that position. They believe that while the letter of intent may state that it is “not binding,” the terms in the letter are not subject to meaningful negotiation once it is signed. More than that, they take the position that if a business or legal term is important to the owner, it must be in the “non-binding” letter of intent; otherwise, the brand will revert to their standard terms and conditions. As becomes painfully clear as the parties negotiate a franchise or management agreement with the brand, there are relatively few points open for negotiation, but if overlooked in the preliminary discussions, it may be impossible to reclaim them no matter how important. CONTINUE READING → By Jim Butler and the Global Hospitality Group® Posted in: Hotel Franchise & License Agreements Published on: October 23, 2020 Updated: October 23, 2020 4:33 pm Published on: September 15, 2020 Boutiques may be adapting faster than other hotel sectors, but still hurting By Jim Butler and the Global Hospitality Group® 15 September 2020 See how JMBM’s Global Hospitality Group® can help you. Click here for the latest articles on the coronavirus. Boutiques may be adapting faster than other hotel sectors, but still hurting The theme of the Boutique Lifestyle Leaders Association’s (BLLA) upcoming Boutique Lifestyle Digital Summit is “Dare to Adapt” and there are some compelling arguments as to why the boutique space may be able to adapt to the current economic crisis faster than other sectors in the hotel industry. “Boutiques can pivot easily,” said Frances Kiradjian, Founder and CEO of the BLLA. “They can make decisions quickly without checking in with brands.” Take cleaning, an area of ...