MORE THAN 300 Asian American hotel owners attended the March 5 kickoff of a new business organization that will focus on franchising in the hospitality industry.
Fair Franchising Initiative has its roots in New Jersey with plans to expand nationwide as it gains momentum by crafting and promoting legislation the organization says will balance the playing field in the franchiser-franchisee relationship.
Fair Franchising Initiative held the conference in a ballroom at Royal Albert’s Palace in Edison, New Jersey. During the three-hour event leaders of the initiative, hotel owners, lawyers and consultants spoke about the impact current franchising practices are having on their businesses as well as the industry overall.
President of the organization is Prakash Shah, a hotelier and owner of First Group Mortgage and Realty Group, an investment bank in New Jersey that specializes in commercial loans.
Chairman is Anil Patel, owner of Northstar Hotels in New Jersey.
The first steps
Fair Franchising Initiative’s flagship effort is A-2682, a hospitality-focused fair franchising proposal introduced in February in the New Jersey General Assembly. The group’s hope is the measure becomes law and sets off a nationwide revolution in the hotel franchising industry.
The proposed New Jersey measure would prohibit franchisers from certain acts, including:
Forcing an owner to spend more than $25,000 more than once every five years on property improvements unless the franchiser can demonstrate the franchisee would recover the value of investment during the contract term.
Receiving rebates or bonuses from brand-certified vendors that sell goods or services to the franchisee unless the deal is transparent in the franchise agreement.
Requiring franchisees to buy from specific vendors or service providers.
Making any unilateral changes to the original franchise agreement during the term of the licensing contract.
Financially penalizing owners for negative guest reviews.
Charging franchisees to resolve guest complaints via calls or emails to the franchiser’s corporate office.
Requiring owners to pay a fee for failing to enroll a specified number of loyalty members.
“This is a problem for all hoteliers over the country,” Shah said. “It’s a problem that we need a solution [for]. People are hurting and it’s not an easy situation they are in. Franchisers are taking advantage of the situation.”
One of the major concerns, Shah said, is the rising cost of guest acquisitions coming from various channels but mostly third-party agents.
“Ten years ago, an average franchiser was charging 7 or 8 percent and they would give you a lot of business in return,” he said. “Today, the business they give you has dwindled because a lot of the business is coming from third-party booking engines like Expedia, and they charge separately for providing that business. So, we’re paying double now for the same business.”
Shah said franchisers have increased their fees to 15 to 17 percent.
Taking it local
The Federal Trade Commission regulates franchising, but many, such as members of Fair Franchising Initiative who say there’s an imbalance in the system, are turning to states to produce laws that create more fairness in the industry.
Shah said New Jersey’s A-2682 is an attempt to lighten the financial burden on hotel owners/operators piled on by franchisers through various fees and penalties.
Along with lobbying New Jersey lawmakers, Fair Franchising Initiative members and hoteliers have launched efforts in other states such as California, Vermont and New York. Shah said the New Jersey bill, if it passes, would have a nationwide impact.
“These things have a cumulative effect,” he said. “We want to take the momentum from this bill in New Jersey and carry it to other states.”
‘We are part of AAHOA’
Anil Patel said as the initiative was organizing charter members asked if he could recruit supporters from past chairmen of AAHOA. Currently, Fair Franchising Initiative board members include past chairmen Mike Patel (1998-99); CK Patel (2010-11); and Hemant Patel (2011-12).
“The issues are clear,” Anil said, noting the initiative wanted experienced leaders to guide the initiative on its quest.
“We are not anti-AAHOA; we are part of AAHOA,” he said, adding he joined the association in the early 1990s.
The topic of fair franchising “has been around as long as we’ve been going to AAHOA meetings.” He sees the current board of directors easing up on the 12 Points of Fair Franchising as the association shifts its efforts to government affairs. He also attributes the shift in focus to new and younger board members who do not relate to the “sweat and blood” shed by charter AAHOA members to build their family businesses.
“Today, franchising is really getting out of control,” Anil said. “It’s a network of who you know and franchise contracts are not equal for all.”
Hoteliers are cutting their own deals with franchisers resulting in licensing agreements that are not uniform with contracts that most other hoteliers sign. The various agreements make it difficult to make sure franchisers adhere to the principals of fair franchising.
“The focus has been a little bit derailed,” he said.
Though most of the Fair Franchising Initiative conference attendees do business in New Jersey, many others have hotels throughout New England, the Mid-Atlantic, Southwest and Southern regions of the U.S.
A few hoteliers at the conference have properties in California, where the state Legislature in 2016 passed amendments to its Franchise Relations Act that places restrictions on franchisers’ decisions to terminate or not renew licenses. It also gives franchisees more freedom to sell their franchised business assets or add investors.
A newer act, AB-5, paves the way for a franchisee to hold a franchiser financially responsible under the state’s wage and hour laws if the franchisee’s business fails and the franchisee loses income as a result.
The International Franchise Association opposed the law, which was passed and signed by Gov. Gavin Newsom in September.
New Jersey Sen. Joseph Cryan, Democrat, District 20, spoke at Fair Franchising Initiative’s conference and vowed to support A-2682.
The bill’s primary sponsor is Assemblyman Raj Mukherji, Democrat, District 33, who introduced it to New Jersey’s General Assembly on Feb. 13.
Mukerji also spoke at the event and promised to move the bill to the House’s Judiciary Committee, which he chairs. He talked about the “lopsided” relationship between hotel franchisers and franchisees.
He said while there are federal laws that address franchising, “there are no laws that protect franchisees.”
“As policy makers, we have a responsibility to level the playing field.”
Peachtree Group originated a $176.5 million retroactive CPACE loan for a Las Vegas property.
The deal closed in under 60 days and ranks among the largest CPACE financings in the U.S.
The company promotes retroactive CPACE funding for commercial real estate development.
PEACHTREE GROUP ORIGINATED a $176.5 million retroactive Commercial Property Assessed Clean Energy loan for Dreamscape Cos.’s Rio Hotel & Casino in Las Vegas. The deal, completed in under 60 days, is its largest credit transaction and one of the largest CPACE financings in the U.S.
The 2,520-room Rio, now under the Destinations by Hyatt brand, was renovated in 2024 and comprises two hotel towers connected by a casino, restaurants and retail, Peachtree said in a statement.
“This transaction is a milestone for Peachtree Group and a testament to the ecosystem we have built over the past 18 years,” said Greg Friedman, Peachtree's managing principal and CEO. “Through our vertically integrated platform, deep expertise and disciplined approach, we have developed the infrastructure to be a leader in private credit. Our ability to deliver speed, creativity and certainty of execution positions us to provide capital solutions that create value for our investors and partners across market cycles.”
Atlanta-based Peachtree is led by Friedman; Jatin Desai as managing principal and CFO and Mitul Patel as principal.
The CPACE loan retroactively funded the renovations, allowing the owners to pay down their senior loan, the statement said. The property improvement plan included exterior work, upgrades to the central heating and cooling plant, electrical infrastructure improvements and convention center renovations.
Jared Schlosser, Peachtree’s head of originations and CPACE, said the deal marks an inflection point, with major financial institutions consenting to its use for the benefit of the capital stack.
“By closing quickly on a marquee hospitality asset, we were able to strengthen the position of both the owner and its lenders,” he said.
The CPACE market has surpassed $10 billion in U.S. originations in just over a decade, according to the C-PACE Alliance, with growth expected as more institutional owners and lenders adopt it.
“We see significant opportunity for retroactive CPACE and its use in funding new commercial real estate development,” Schlosser said. “It is an alternative to more expensive forms of capital.”
In June, Peachtree named Schlosser head of originations for all real estate and hotel lending and leader of its CPACE program. Peachtree recently launched a $250 million fund to invest in hotel and commercial real estate assets mispriced by capital market illiquidity.
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Spark acquired the 120-key Home2 Suites by Hilton Wayne in Wayne, New Jersey.
Hunter Hotel Advisors facilitated the transaction with DC Hospitality Group affiliates.
The 2020-built hotel is near William Paterson University and less than 20 miles from Manhattan.
SPARK GHC RECENTLY acquired the 120-key Home2 Suites by Hilton Wayne in Wayne, New Jersey, from affiliates of DC Hospitality Group. Hunter Hotel Advisors facilitated the deal for an undisclosed amount.
The 2020-built hotel is less than 20 miles from Manhattan in a commercial corridor with major employers including Driscoll Foods, FedEx Group, Advanced Biotech, St. Joseph’s Wayne Hospital, and the Passaic County Administration, Hunter said in a statement. William Paterson University, Willowbrook Mall, and MetLife Stadium are also nearby.
It features an on-site fitness center, business center and indoor pool.
“The Home2 Suites by Hilton Wayne represents the type of asset we target,” said Patel. “Its proximity to major corporate demand generators, higher education institutions, and retail and entertainment venues supports strong performance.”
Hunter’s senior vice presidents, David Perrin and Spencer Davidson, brokered the transaction.
Patel said this is their second transaction with Hunter and praised the process and partnership.
“We look forward to building on the hotel’s recent performance and continuing to deliver guest experiences in the Greater New York City community,” he said.
Northstar Hotels Management recently acquired a 78-key Residence Inn and an 81-key Courtyard near the Jacksonville, Florida, airport.
Global pipeline hit a record 15,871 projects with 2.4 million rooms in Q2.
The U.S. leads with 6,280 projects; Dallas tops cities with 199.
Nearly 2,900 hotels are expected to open worldwide by the end of 2025.
THE GLOBAL HOTEL pipeline reached 15,871 projects, up 3 percent year-over-year, and 2,436,225 rooms, up 2 percent, according to Lodging Econometrics. Most were upper midscale and upscale, LE reported.
The U.S. leads with 6,280 projects and 737,036 rooms, 40 percent of the global total. Dallas leads cities with 199 projects and 24,497 rooms, the highest on record.
LE’s Q2 2025 Hotel Construction Pipeline Trend Report showed 6,257 projects with 1,086,245 rooms under construction worldwide, unchanged in project count and down 3 percent in rooms from last year. Projects scheduled to start in the next 12 months totaled 3,870 with 551,188 rooms, down 3 percent in projects but up 1 percent in rooms. Early planning reached 5,744 projects and 798,792 rooms, up 10 percent in projects and 9 percent in rooms year-over-year.
Upper midscale and upscale hotels accounted for 52 percent of the global pipeline, LE said. Upper midscale stood at 4,463 projects and 567,396 rooms, while upscale reached 3,852 projects and 655,674 rooms. Upper upscale totaled 1,807 projects and 385,396 rooms, and luxury totaled 1,267 projects and 245,665 rooms, up 11 percent year-over-year.
In the first half of 2025, 970 hotels with 138,168 rooms opened worldwide. Another 1,884 hotels with 280,079 rooms are scheduled to open before year-end, for a 2025 total of 2,854 hotels and 418,247 rooms. LE projects 2,531 hotels with 382,942 rooms to open in 2026 and 2,554 hotels with 382,282 rooms to open globally in 2027, the first time a forecast has been issued for that year.
HAMA is accepting submissions for its 20th annual student case competition.
The cases reflect a scenario HAMA members faced as owner representatives.
Teams must submit a financial analysis, solution and executive summary.
THE HOSPITALITY ASSET Managers Association is accepting submissions for the 20th Annual HAMA Student Case Competition, in which more than 60 students analyze a management company change scenario and provide recommendations. HAMA, HotStats and Lodging Analytics Research & Consulting are providing the case, based on a scenario HAMA members faced as owner representatives.
Student teams must prepare a financial analysis, a recommended solution and an executive summary for board review, HAMA said in a statement.
“Each year, the education committee looks forward to the solutions that the next generation of hotel asset managers bring, applying their own experiences to issues in ways that reveal new directions,” said Adam Tegge, HAMA Education Committee chair. “This competition demonstrates that the future of hotel asset management is in good hands.”
The two winning teams will each receive a $5,000 prize and an invitation to the spring 2026 HAMA conference in Washington, D.C. HAMA will cover travel and lodging.
Twenty industry executives on the HAMA education committee will evaluate submissions based on presentation quality, the statement said. HAMA mentors volunteer from September through November to assist teams seeking feedback and additional information. Schools will select finalists by Jan. 15, with graduate and undergraduate teams reviewed separately.
The competition has addressed topics in operating and owning hospitality assets and HAMA consulted university professors to update the format for situations students may encounter after graduation, the statement said.
This year’s participants include University of Denver, University of Texas Rio Grande Valley, Boston University, Florida International University, Michigan State University, Columbia University, Morgan State University, Howard University, New York University and Penn State University.
Stonebridge Cos. added the Statler Dallas, Curio Collection by Hilton, to its managed portfolio.
The hotel, opened in 1956 and relaunched in 2017, is owned by Centurion American Development Group.
The property is near Main Street Garden Park, the Arts District and the Dallas World Aquarium.
STONEBRIDGE COS. HAS contracted to manage the Statler Dallas, Curio Collection by Hilton in Dallas to its managed portfolio. The hotel, opened in 1956 and relaunched in 2017, is owned by Centurion American Development Group, led by Mehrdad Moayedi.
It has an outdoor pool and more than 26,000 square feet of meeting space, Stonebridge said in a statement. The downtown Dallas property is near Main Street Garden Park, the Arts District, the Kay Bailey Hutchison Convention Center, Deep Ellum, Klyde Warren Park, and the Dallas World Aquarium.
“The Statler is an extraordinary asset with a storied history in Dallas, and we are thrilled to welcome it to our managed portfolio,” said Rob Smith, Stonebridge’s president and CEO. “Its blend of modern hospitality with timeless character makes it a natural fit within our lifestyle collection. We look forward to honoring the property’s legacy while enhancing performance and delivering an elevated guest experience.”
Stonebridge, based in Denver, is a privately held hotel management company founded by Chairman Navin Dimond and led by Smith. The company recently added the 244-room Marriott Saddle Brook in Saddle Brook, New Jersey, to its full-service portfolio.