Howard Johnson by Wyndham Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$333,899 - $11,490,271
Franchise Fee
$5,000
Total US Locations
143
Business Summary
Howard Johnson International, Inc. offers, sells, and supports franchises for Howard Johnson and Howard Johnson® by Wyndham guest lodging facilities. These facilities provide overnight accommodations and related services, primarily targeting families and leisure travelers in the economy segment in North America, while internationally, the brand includes upper mid-scale to full-service hotels. Howard Johnson facilities typically feature contemporary interior and exterior design, mid-market level furnishings, and amenities like swimming pools, fitness rooms, complimentary breakfast, and high-speed Internet access.
Corporate History
Howard Johnson International, Inc. was incorporated in Delaware on May 15, 1990, and began offering franchises for its guest lodging facilities in July 1990. The brand operates predominantly in the economy segment in North America, catering to families and leisure travelers, but also includes upper mid-scale to full-service hotels internationally. Howard Johnson International, Inc. is a subsidiary of Wyndham Hotel Group, LLC, which is wholly owned by Wyndham Hotels & Resorts, Inc. (WHR). WHR was established on May 31, 2018, as a result of a spin-off from Wyndham Worldwide Corporation, becoming a standalone public company trading on the New York Stock Exchange.
Financial Overview
Investment Range
$333,899 - $11,490,271
Franchise Fee (Low)
$5,000
Franchise Fee (High)
$35,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$150,862
Equipment Costs (High)
$1,018,579
Working Capital
$159,098
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Wyndham Hotels & Resorts, Inc.'s financial statements for the period ended December 31, 2023, show that the company received an unqualified audit opinion, indicating that its financial statements are presented fairly in all material respects. As of December 31, 2023, Wyndham Hotels & Resorts, Inc. had a negative working capital of $86 million, a decrease from a positive $139 million in 2022. Despite this, the independent auditors did not express a 'going concern' qualification, and management believes its internal control over financial reporting is effective.
Financing Details
Howard Johnson International, Inc. does not generally offer direct or indirect financing to franchisees, except for specific programs. Howard Johnson International, Inc. may defer the payment of the Initial Fee, typically for up to 90 days or until the facility opens, usually in one to three interest-free installments, unless there is a default. Additionally, Howard Johnson International, Inc. offers 'Development Incentive Financing,' which is a loan that does not require repayment unless the franchise agreement terminates or transfers before its full term, in which case the balance must be repaid. This incentive is forgiven annually over 15 or 20 years and is interest-free unless a default occurs, at which point an 18% annual interest rate applies. Eligibility for this incentive depends on factors like room count, location, and a positive feasibility study, and it may be disbursed in cash or to a third party for hotel construction or renovation. Howard Johnson International, Inc. also has special financing programs: the 'Women Own the Room (WOTR) Development Incentive' targets women entrepreneurs, offering up to $2,500 per guest room (not exceeding 50% of equity investment) along with operational support. The 'Black Owners & Lodging Developers (BOLD) Support' program provides customized guidance and may also include a Development Incentive for Black entrepreneurs.
Performance Metrics
Total US Locations
143
Franchised Units
143
Corporate Units
0
Franchising Since
1990
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
9
Litigation Summary
Howard Johnson International, Inc. is involved in several legal matters. One ongoing case from 2019, Lancs Hospitality LLC, et al. v. Days Inns Worldwide, Inc., et al., involves former franchisees suing Howard Johnson International, Inc. and other Wyndham entities for alleged violations of the NJ Franchise Practices Act, breach of contract, and breach of implied covenant of good faith, seeking damages and rescission of guarantees. Wyndham Hotels has filed counterclaims for breach of contract. Default judgment was granted against the corporate franchisees, and a motion for summary judgment against individual guarantors is pending. Another class action from 2014, Norma Knuth v. Wyndham Worldwide Corporation, et al., pending against Wyndham's lodging affiliates, alleges improper charging of a 'Destination Marketing Fee' in Canada, seeking substantial restitution and damages. Historically, Howard Johnson International, Inc. settled a class action in 2015, Loren Stone v. Howard Johnson International, Inc., related to surreptitiously recorded telephone conversations with consumers, paying $1,500,000. Wyndham's lodging affiliates have also resolved several cases, including a 2020 class action settlement regarding resort fees (Thomas Luca, Jr. v. Wyndham Worldwide, et al.), a 2019 settlement over alleged Sherman Antitrust Act violations (Jay Brodsky v. Hilton Worldwide Inc., et al.), a 2015 settlement with franchisees over alleged Minnesota Franchise Act violations (Percy Pooniwala and Dinaz Pooniwala v. Wyndham Worldwide, Inc., et al.), a 2016 class action settlement for unconsented telephone recordings (Joyce Roberts v. Wyndham International, Inc., et al.), and a 2015 settlement with the FTC regarding cyberattacks (FTC v. Wyndham Worldwide Corporation, et al.). Another case from 2014, FFC Capital Corporation v. Wyndham Hotel Group, LLC, was settled in 2015 for $260,000 related to a breach of contract claim. Most recently, in 2023, Howard Johnson International, Inc. commenced litigation against Bright Ma Ave., LLC and Joseph Fan for breach of contract.
Bankruptcy History
Howard Johnson International, Inc. has no bankruptcy history to disclose.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Howard Johnson International, Inc. does not grant renewal rights. However, if applicable law requires an offer of renewal, Howard Johnson International, Inc. and the franchisee must mutually agree to renew. If they elect to renew, franchisees must sign the then-current franchise agreement, which may contain materially different terms, and pay the Relicense Fee, which is calculated using the same formula as the Initial Fee. Other conditions include executing a general release (unless restricted by law), completing a property improvement plan, and paying a standard renewal fee if applicable.
Training & Support Program
Franchisor Assistance
Howard Johnson International, Inc. provides extensive support and assistance to its franchisees, starting before the facility opens. This includes approving selected sites and designating a protected territory. For conversion or transfer facilities, Howard Johnson International, Inc. inspects the property and creates a Property Improvement Plan (PIP). For new construction, the Architecture, Design and Construction team consults with architects and reviews architectural plans. Howard Johnson International, Inc. conducts inspections during or after construction/renovation and provides franchisees with access to its confidential Standards of Operation and Design Manual, which contains specifications for facility operation, furniture, fixtures, and equipment. Howard Johnson International, Inc. also furnishes written specifications for required products and services and provides information on Approved Suppliers. Optional services like reviewing custom interior design packages and online media campaigns for opening are available for a fee. After opening, Howard Johnson International, Inc. continues to provide ongoing access to the updated Manual and may hold Chain conferences every 18 to 24 months. It conducts both announced and unannounced inspections. Franchisees receive operational support and information via email, telephone, or the Chain's intranet site, with field team members periodically visiting compliant facilities. Howard Johnson International, Inc. provides access to a proprietary online platform (Wyndham Community) for brand-specific information and business tools. Key technology support includes a computerized Central Reservation System (CRS) and the Signature Reservation Service (SRS), which routes customer reservation inquiries to professional agents. Optional services like comprehensive revenue management programs (Standard and Premium levels) and remote local sales services are available for additional fees. Franchisees receive access to a customer experience software platform (Medallia) that aggregates guest reviews, and Howard Johnson International, Inc. responds to certain reviews on their behalf, with fees potentially waived for positive guest satisfaction scores. A guest engagement platform for mobile texting is also provided, currently without charge. Continuing education for the entire hotel team is offered for an annual fee of $600, including regional workshops, access to Wyndham University, and service culture support materials.
Initial Training Hours
108
Training Location
Corporate designated locations (Parsippany, NJ or central North America), online/virtual, and on-site at the franchisee's facility.
Ongoing Support
Howard Johnson International, Inc. provides continuous support to its franchisees after opening. This includes ongoing access to its updated Standards of Operation and Design Manual and participation in Chain conferences held approximately every 18 to 24 months. The franchisor conducts both announced and unannounced inspections, and offers operational support and information via email, telephone, or through the Chain's intranet site, with field support teams periodically visiting compliant facilities. Franchisees gain access to a proprietary online platform, Wyndham Community, which provides brand information, reporting tools, marketing resources, and access to sales, loyalty, and revenue management resources. Howard Johnson International, Inc. also keeps franchisees informed about Approved Suppliers and provides a computerized Central Reservation System. The Signature Reservation Service offers professionally-trained agents to handle guest reservation inquiries. Additionally, optional revenue management programs (Standard and Premium levels) and remote local sales services are available for an additional fee. Franchisees receive access to a customer experience software platform (Medallia) that aggregates guest reviews, and Howard Johnson International, Inc. responds to certain reviews on their behalf, with fees potentially waived for positive guest satisfaction scores. A guest engagement platform for mobile texting is also provided, currently without charge. Continuing education for the entire hotel team is offered for an annual fee of $600, including regional workshops, access to Wyndham University, and service culture support materials.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Protected
Territory Size Requirements
Howard Johnson International, Inc. negotiates each Protected Territory based on factors such as market nature (urban, suburban, rural), population density, demographics, natural travel boundaries (like rivers or impassable lands), public and private facilities that generate lodging demand (including airports, highways, sports venues, colleges, military bases, tourist attractions, hospitals, shopping malls, and commercial/industrial activities), and the seasonal or weekday versus weekend occupancy patterns of the facility. The territory can be defined as a radius from the facility's door, an irregular area bounded by streets, highways, governmental jurisdictions, or natural boundaries, or by latitude and longitude. The specifics of the territory are detailed in Section 2 of the Franchise Agreement, and there is no minimum size offered.
Staffing Notes
Howard Johnson International, Inc. does not require franchisees to personally manage their facilities, but recommends it. If the franchisee does not manage the facility directly, they must hire a management company or an individual manager with significant training and experience in general management of similar lodging facilities. This manager must successfully complete Howard Johnson International, Inc.'s training program. Franchisees are solely responsible for all employment decisions, including recruitment, hiring, firing, scheduling, compensation, and training of their staff. Howard Johnson International, Inc. may require a third-party manager or management company if the franchisee lacks significant hotel management experience or is receiving a Development Incentive. All personnel in designated positions must attend and successfully complete initial and other required training programs, including a Human Trafficking prevention course and 'Count on Us' training, with the general manager responsible for certifying staff training. Howard Johnson International, Inc. also provides a comprehensive curriculum of ongoing hotel operations training for the entire hotel team through Wyndham University.