Dancer bill to protect local hotel operators advances

Dancer bill to protect local hotel operators advances

TRENTON, N.J. – A bill that will help keep local hotel operators in business was released from the Assembly Judiciary Committee Thursday.

Assemblyman Ron Dancer’s bill (A1958) would protect local hotel franchisees – those licensed to use a trade name, trademark, or characteristic for the marketing of goods or services – from burdensome requirements of larger corporate franchisers.

For example, franchisers would be forbidden from forcing franchisees to make expensive improvements more than once every five years, and must give franchisees rebates or other benefits received from vendors that the franchisee is required to use.

“The pandemic-related lockdowns hurt many New Jersey businesses, including hotels,” Dancer (R-Ocean) said. “My bill, while not a direct response to those lockdowns, will better balance the playing field. This bill will ensure fairness and profitability for small business owners who run the brands on behalf of large corporations.”

Licensing a hotel franchise can cost millions between the initial fees and other investments. After that, according to the Fair Franchising Initiative, hotels face shrinking profit margins because of third-party online booking sites, like Travelocity or Expedia. Directives from the large companies – hotel franchises in New Jersey include Hyatt, Sheraton, and Motel 6 – can unnecessarily inflate costs for local businesses, hurting their bottom line.

“Costs continue to rise, and economic experts are claiming it may still be several years before the hotel industry gets to pre-lockdown numbers. The power in the relationship between the local business owner and a corporate entity is often lopsided, which my bill aims to fix to help local operators stay in business and provide jobs,” Dancer said.