In Hotel Management’s 140th anniversary issue, the magazine featured a Q&A with My Place Hotels founder Ron Rivett. We thought it would be interesting to check in with Ron’s grandson Ryan Rivett, who joined forces with Ron on My Place Hotels in 2011. The brand began franchising in 2014.
1. How and when did you get your start in the hospitality industry?
I started in the hospitality industry in 2006 working in various capacities within our organization. In the early years my focus was primarily on construction and development, which has provided a great foundation for how to build and scale a hospitality business. Working in administration, hospitality asset and operations management came into my purview a few years after I started and while the front and back ends of the hospitality business horizon are vastly different, balancing the two has been most rewarding.
2. What are some of the ways franchising has changed the most in recent years, and what is your take on franchising in America?
It’s been a roller coaster for business in general since we began franchising in 2014, and I believe that evoked a myriad of both necessary and seemingly unnecessary changes within the franchising world. In particular, the volume of new hospitality brands that have emerged has significantly increased the complexity of the franchise underwriting decision. Another significant evolution within franchising is the landscape of third-party technology platforms that have emerged and the dynamic integrations required to maintain pace with ever-broadening distribution and CRM channels. We’ve found, and I believe others in franchising have as well, that being nimble with franchise operations and staying closer to the process of franchise development has become significantly more important than in past periods.
3. What are some of the biggest mistakes owners make when negotiating franchising terms?
The integrity of the franchise system begins with the integrity of the franchise agreement. To the extent it’s possible [by regulation] we’ve strived to maintain a very balanced and intentionally executable franchise agreement, and there are very few elements which are generally subject to negotiation. What I have observed from franchisees in their initial underwriting and negotiations process is that often negotiating/mitigating personal liability and eliminating the finer points of default take precedent over potential value add opportunities in business terms. The other aspect of deficiency I often see is defensive acquisition. This doesn’t come into play with us as often as a result of our current scale, but observing a franchisee acquiring a franchise for a location simply to preserve market share has often worked out to be a fallible play. A good business decision is reinforced by a balanced agreement not the other way around.
4. What did you learn from growing up in the industry?
Maybe the more interesting question is what didn’t I learn… It’s such a dynamic business. I guess the overarching perspective and lesson I’ve learned from growing up in the industry is the value of relationships and how they contribute to not only the success of a business, but even more so the enjoyment of the process. At an early age, I attached to the perspective that you must build people’s confidence in you before they’ll really listen. As I got older, I recognized more that the quality of the relationship should grow proportionately to value over time. The imbalance in that ratio diminishes returns for both sides. Finally, the resilience of the business is really impressive, and I think that has a lot to do with how the industry requires continuity in the relationship chain at all levels. As operators and administrators at all levels, listening and staying close to the guests who choose to stay in our hotels is imperative, but this is also true for the builder and developer, the lender and the investor—understanding the fundamental perspective and loyalty of the end user is crucial for every business, and unlike many, we in hospitality have the consistent privilege of ongoing connection with our end users.
5. What is the future of My Place? Are you ramping up development and if so, in what markets?
We’re still having fun, and the future of My Place looks bright. We’ve had some significant evolutions and internal platform launches in our franchise operations, national sale, revenue management, and marketing focuses over the past 24 months or so. Our franchisees, operators, and guests are responding positively, so that’s been extremely rewarding. Franchise development has been somewhat challenging for everyone in the last few years, and rather than stretching resources and bending integrity to stimulate growth, we’ve honed processes and narrowed focus on emboldening existing relationships and applying diligent focus to larger development agreements and programmatic structures that maintain stability while producing incremental growth. So, while you may not see some of the exorbitant “pipeline” numbers being posted, our pipeline growth and locations in operation continue to be correspondent, substantiated and up trending.
To read the original Q&A with Ron Rivett, visit hotelmanagement.mydigitalpublication.com/july-2015/page-44
This article was originally published in the October edition of Hotel Management magazine. Subscribe here.