Comfort Inn 2011 Annual Report Download - page 14

Table of Contents
representing approximately 19% of our franchise system hotels open at both December 31, 2011 and 2010.
In some territories outside the United States hotel franchising is less prevalent, and many markets are served primarily by independent operators. We
believe that chain and franchisor affiliation will increase in certain international markets as local economies grow and hotel owners seek the economies of
centralized reservations systems and marketing programs. We believe that international franchise operations will provide a significant long-term growth
opportunity for the Company and as a result have initiated a multi-year investment in information technology and marketing which is expected to enhance the
value proposition for prospective international franchisees.
As of December 31, 2011, we had 1,177 franchise hotels open and operating in over 30 countries and territories outside of the United States. The
following chart summarizes our franchise system outside of the United States.
 






Number of properties, end of period 1,125
1,111
1,115
1,149
1,177
Number of rooms, end of period 97,888
98,642
98,816
101,610
104,379
Royalty fees ($000) $22,234
$25,599
$ 20,984
$23,765
$26,989
____________________________
(1) Reporting of operating statistics (e.g. average occupancy percentage and average daily room rate) of international franchisees is not required by all master
franchise contracts, thus these statistics and RevPAR are not presented for international franchisees.
Scandinavia. We conduct our operations in Scandinavia through a master franchise relationship with Nordic Choice Commercial Services A/S
("NCH"), formerly known as Choice Hotels Scandinavia. As of December 31, 2011, NCH had 160 open properties in its development territory, which
includes Denmark, Norway and Sweden on an exclusive basis and Estonia, Finland, Iceland, Latvia and Lithuania on a non-exclusive basis. The
Company’s master franchise agreement with NCH grants rights to the Comfort, Quality, Sleep and Clarion brand and expires in 2023. Through a separate
agreement signed in 2010, we have also granted NCH limited rights to franchise Ascend Collection Hotels in its territory.
Japan. The Company conducts its operations in Japan through a master franchise relationship with Choice Hotels Japan Co. Ltd (“CHJ”). CHJ
possesses exclusive rights to develop the Comfort and Quality brands and non-exclusive rights to the Sleep and Clarion brands. The Company’s master
franchise agreement with CHJ expires in 2014 with CHJ possessing a conditional option to renew the agreement one time for an additional term of ten years. As
of December 31, 2011, CHJ had 52 open properties.
Continental Europe. The Company conducts franchising operations in continental Europe through two wholly-owned subsidiaries, Choice Hotels
Franchise GmbH and Choice Hotels France SAS in the Czech Republic, France, Germany, Italy, Portugal and Switzerland. At December 31, 2011, the
Company’s subsidiaries had 204 properties open and operating in continental Europe.
Ireland. In August 2007, the Company entered into a ten year master franchising agreement with Ireland-based Cordelle Enterprises, doing business as
Choice Hotels Ireland (“CHR”), for the exclusive right to develop our Clarion, Quality and Comfort brands in Ireland and Northern Ireland. Prior to acquiring
the master franchising rights directly from the Company, CHR operated the Company’s brands under an area representative agreement with The Real Hotel
Company PLC ("RHC"), which previously held the master franchise rights in Ireland. The master franchise agreement with CHR expires in 2022. As of
December 31, 2011, CHR had 10 properties open and operating.
United Kingdom. In 2007, the Company entered into a definitive agreement with RHC to transfer United Kingdom franchising operations, which were
previously operated under a master franchise agreement with RHC, to the Company on January 31, 2008. On that date, the master franchise agreement was
terminated and the existing franchise agreements were assigned to a wholly-owned subsidiary, Choice Hotels Licensing B.V. (“Choice BV”). At December 31,
2011, the Company’s subsidiary had 39 properties open and operating in the United Kingdom.
Canada. We conduct our operations in Canada for all of our brands except Cambria Suites, MainStay Suites and Suburban Extended Stay Hotel
through Choice Hotels Canada Inc. (“CHC”) a joint venture owned 50% by us and 50% by InnVest Management Holdings Ltd. CHC is one of the largest
lodging organizations in Canada with 303 of our franchised properties open and operating as of December 31, 2011. The Company conducts direct
franchising operations for its extended
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