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Monday, October 22, 2012

Case Study Analysis of Hospitality Franchise Systems, Inc.

Over one-half on the Indians associated with Hospitality Franchise Systems are on the Patel Clan whose members were active in hotel management in India for centuries. Approximately one-third of the hotel properties associated with Hospitality Franchise Systems that operate under the Ramada, Howard Johnson, and Super 8 names are owned and operated by Indian immigrants from the Patel Clan, while over one-half of the hotels operating under the Days Inn name are owned and operated by Patels. The hard working and thrifty Indians have generated most of the capital required, thereby freeing Hospitality Franchise Systems inside the capital generation burden to fund expansion.

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The typical Indian owner operator of a Hospitality Franchise Technique hotel holds at least 1 university degree, generally in accounting or engineering. This level of education, however, has not deterred these people from assuming housekeeping and night shift duties after necessary.

Hospitality Franchise Systems long in assistance concepts in the lodging market towards the actual estate brokerage industry on the acquisition of Century 21 from Metropolitan Life Insurance Company. Hospitality Franchise Systems plans for Century 21 for getting "mom and pop" realty brokerages to fuel growth along the lines with the strategy followed by the business in building its presence from the lodging industry. The anticipation is how the company's entr

 

Service Concepts Underlying the Company's Firm Strategy

J. C. Davis, "Franchisors Foster Certain Numbers By Offering Numerous Brand Names," National Actual Estate Investor, May possibly 1994, 66-68.

d. Sales to fixed assets. The sales to fixed assets ratios were 8.27 times (1994), 8.54 times (1993), and 10.67 times (1992). Fixed assets in relation to sales levels elevated over the period of analysis. This trend reflected a much less efficient use of fixed assets by the company.

1. ROI assessment (DuPont analysis). ROI, as determined by DuPont analysis, was 6.84 percent (1994), 2.92 percent (1993), and 3.32 percent (1992). The company's total asset turnover was relatively stable over the period of analysis. Therefore, the considerable improvement in ROI in 1994 was a reflection from the improved level of world-wide-web profit on sales achieved by the company.

3. Asset utilization analysis. Asset utilization was analyzed within the contexts of (a) sales to income (b) sales to accounts receivable, (c) sales to working capital, (d) sales to fixed assets, and (e) sales to total assets. As Hospitality Franchise Systems, Inc. carries no inventories, an analysis of sales to inventories was not appropriate.

Nozar, R. A. "HFS Continues Global Dominance." Hotel & Motel Management 210 (18 September 1995): 34-35.

Financial ratio analysis was performed in relation to (1) short-term liquidity, (2) operating performance, and (3) asset utilization. The findings in the ratio analysis are as follows:

The findings in the analyses with the company's financial performance and position are presented in this section. The period of analysis covers the company's fiscal many years 1992 via 1994. These findings are presented in relation to (1) ratio analysis, (2) DuPont analysis, (3) leverage analysis, (4) cash-flow analysis, and (5) regression-based projections earnings-per-share (EPS).

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