ON AUG. 1, COBBLESTONE Hotels acquired Key West Inns/ Hotels/Resorts and Centerstone Inns/Hotels/Plaza Hotels, the primary assets of Vimana Franchise Systems. The acquisition spells the end of Vimana as a functioning entity and the beginning of Cobblestone’s move into franchising.
Along with Cobblestone’s 88 owned properties, the deal added 38 franchised properties to the company’s portfolio. It adds 5,400 rooms in 25 states with Vimana’s brands joining Cobblestone Hotel & Suites, Cobblestone Inn & Suites and Boarders Inn & Suites by Cobblestone Hotels. It exceeds Cobblestone President, CEO and founder Brian Wogernese’s goal of opening 100 new properties by the end of 2018. The company expects to open four more properties before the end of the year.
Neither company would disclose the amount of the all-cash deal.
Up until now, Cobblestone has been focused on developing corporate-owned, new-build properties, growing at a rate of eight to 12 new hotels a year, said Patrick Mullinix, Cobblestone’s new president of franchise development. The Centerstone and Key West acquisition is an opportunity to accelerate its growth strategy.
“It gave Cobblestone the diversity of having some conversion brands positioned in completely different segments,” he said. “We bought the brands to keep the hotel chains intact.”
Key West, an upper economy product, is well positioned for marketing in coastal markets, Mullinix said. “We’re going to continue that path with Key West.”
Centerstone is a full-service, upper-midscale segment brand with meeting space. Cobblestone plans to market the brand for conversion opportunities.
Boarders Inn & Suites by Cobblestone is a limited-service upper-midscale conversion brand.
Cobblestone will continue to keep its upper-midscale namesake brand a company-owned new-construction product. “There is no change in that because it’s been such a successful part of the Cobblestone DNA,” Mullinix said.
Mullinix’s team will oversee the franchising side, including Centerstone and Key West. The soft launch of the program has been met with a strong response in the past month since he came on board, with at least a dozen franchising opportunities in the works. He plans to grow the brands through direct marketing and strong attendance at conferences.
“The AAHOA shows have been a great opportunity for us to get out in front of the type of franchisee we want,” Mullinix said.
Mullinix is no stranger to growing brands, having overseen expansion at Red Lion Hotels Corp. as senior vice president of franchise after its merger with Vantage Hospitality Group, where he had overseen franchise development of Americas Best Value Inn and other brands.
“We’ve never had a team that is solely focused on pure franchise development,” Wogernese said. “Patrick’s team will help take all of these brands and grow them. We hope to take our steady growth of 12 to 15 hotels a year to 20 to 30.”
Steve Belmonte founded Vimana Franchise Systems in 2012 with Cory and Neal Jackson. It was his idea to sell Centerstone and Key West to Cobblestone.
“We were all very proud of the success we had because we launched two brands with three tiers each,” Belmonte said.
Despite that initial success, Belmonte said he approached Cobblestone because he thought it could be the company to take Centerstone and Key West further.
“As we entered into 2018 we really thought the brands should be in the hands of a company with a bigger infrastructure and a bigger budget to grow the brands,” he said.
He picked Cobblestone because it has a franchise-friendly system.
“I think the winners of this acquisition are really the franchisees,” he said. “I think both brands have a very bright future.”
Vimana’s Independent Collection consisted of some independent hotels that had established names and used Centerstone as a secondary name.
Vimana now exists in name only for legal reasons, Belmonte said. He recently moved to Tennessee and is working on new projects.
“If I do something, it will be on my own,” he said.
Belmonte, who started in the hotel business at 16, founded Hospitality Solutions 16 years ago and eventually sold it to his son Michael. Before that he had spent 11 years working for Wyndham Hotel Group and its predecessor Cendant Corp. as CEO of Ramada Inn and executive vice president of Cendant’s hotel division.