Randolph, N.J. — Oct. 15, 2004 — (USFranchiseNews)-How preferable is mediation over litigation in franchise-agreement disputes? Just ask Naresh "Harry" Patel, manager of Sky Hospitality LLC, a small hotel company in Clearwater, Fla., that owns and operates three local lodging properties.

"I wanted help in terminating the franchise agreement on a Ramada Inn that we own in Clearwater," Patel said. "We had two years to go on the agreement, but as far as I could tell, we were within our rights to terminate. But these franchising documents are so complex and intricate that you pretty much have to hire an attorney to interpret them and then take your case to courts for resolution—and that's a long, very expensive way to go."

But Patel was approaching the point of going that way—until he heard about Hospitality Solutions LLC, a Randolph-based firm founded by longtime lodging executive Steve Belmonte that specializes in franchisee/franchisor negotiations and mediation.

"I had friends in the hotel business who had hired Steve to help in disputes like mine," Patel said. "They told me Steve has in-depth knowledge of the complex franchise agreements and that his fees were far less than it would cost us to hire an attorney. I called him right away, and the next thing I knew Steve was working with us to get the dispute resolved."

It didn't take long for Belmonte and his Hospitality Solutions associate, Wayne Miller, to negotiate a solution to the dispute between Ramada and Patel's Sky Hospitality LLC.

"Steve and Wayne solved the problem within approximately 30 days by sitting down with Ramada, and in a professional, businesslike way, coming to an agreement that satisfied concerned parties," Patel said. "Their thorough knowledge of the in-and-outs of the franchise agreement was critical to getting this done. If I had done this myself, it would have cost me approximately $200,000 in franchise-termination fees, and probably at least as much if I'd have retained a lawyer and taken the dispute to court. The fees Steve charges me were next to nothing compared to what it would have cost me if I did it myself or hired a lawyer."

Belmonte, founder and President of Randolph-based Hospitality Solutions LLC and the former President and C.E.O. of Ramada Franchise Systems, says Hospitality Solutions offers a large range of services in addition to franchise negotiations, such as new license agreement negotiations, expert witness, litigation support, mediation and liquidated damage negotiations.

"Basically, the franchise negotiation services we're offering never existed before—no one specialized in hammering out solid, equitable agreements either at the front end or the back end," Belmonte said. "Up until now, you had to do it yourself or hire a lawyer for this kind of negotiation—and the chance that the typical lawyer really knows the ins and outs of hotel franchising agreements is pretty slim. Franchisees need someone who knows the industry and these agreements inside and out."

In other words, Hospitality Solutions has created a quick, low-cost alternative to solving franchise-agreement disputes.

"We can wrap up the typical project in as little as two weeks, and in my experience it usually takes attorneys that long just to get you on their calendar," Belmonte said. "Cost-wise, there's no comparison. Our typical franchise termination project is done for a flat fee of $3,900 and comes with a no-risk guarantee—it's usually at least five times that much for an attorney to do the negotiating."

Belmonte says that franchise negotiation services are particularly needed in times like the present, when the economy is having a decidedly negative impact on the hotel business.

"Many franchisees are experiencing the kinds of problems Harry Patel was going through with his Ramada Inn," Belmonte says. "But our franchise-negotiation expertise isn't limited to Cendant brands—we literally have done negotiations with every major franchise in America, and I think what we bring to the negotiation process can result in a win-win situation all the way around. The franchisee is happy because he's gotten out of an agreement he wants to be out of, or has been assured that the one we've negotiated is fair and solid, and the franchisor is happy because the dispute has been taken care of quickly and equitably."

"Up until Steve founded Hospitality Solutions LLC a couple of years ago, there weren't any negotiation firms for small companies like mine to turn to," Patel said. "Now that franchisors know that someone in the industry will fight for the small hotel businessman, the franchisors are more open than they ever were to sit down and negotiate.

"Any hotelier who runs into a franchise dispute should get help settling it through negotiation instead of litigation," Patel added. "Negotiation saves on costs, it saves on time, and when it's done right, everyone leaves the table happy."

About Hospitality Solutions LLC
Hospitality Solutions LLC, Randolph, N.J., provides franchise agreement formulations and termination negotiation assistance, mediation, consulting, litigation support and expert witness services to the hospitality and service industries. Company President and CEO Steven Belmonte, former President and CEO of Ramada Hotels, also served as Chairman of the American Hotel & Lodging Foundation, serves on the Board of Directors of Arlington Hospitality Inc., is a member of AAHOA's Industry Relations Committee, and serves as a partner with Belmonte/Lasky Asset Management Inc.

Hospitality Solutions LLC