The Practical Aspects of Terminating and Unwinding Hotel Management and Branding Relationships
2014 Hospitality Law Conference
10 February 2014
- Initiation of Conversion to Franchise or Complete Termination
- Assess the situation (who is doing what to whom and why):
- Is termination by contractual right, mutual agreement, court order or other?
- Conversion to franchise or de-flag?
- Continued operation or shut down after termination?
- What is the nature of relationship:
- Is this a friendly or hostile transaction?
- Who is driving the decision?
- Will third parties such as a lender, asset manager or receiver be involved in the process?
- Always strive for professional resolution.
- Review management agreement to fully understand each party’s rights.
- Determine whether to enter into termination agreement or rely on existing provisions of management agreement.
- What obligations will/should survive?
- Focus on indemnification provisions.
- Assess the situation (who is doing what to whom and why):
- Conversion/De-Flag Working Team
- Determine business lead and other parties’ players (who is decision maker for each party).
- Discipline contacts – above property (legal, HR, sales, operations and finance) and on-property (executive team).
- Develop “critical-path” checklist for each discipline.
- Employees of the Hotel
- Notification timeline (why do the employees “always seem to know”).
- Sharing of employee information with new manager/employer; be careful of personal information.
- Coordination of employee communications.
- Hire, termination, transition, severance issues.
- Allocation, if any, of relocation costs.
- Non-solicitation issues.
- Collective bargaining agreements — notice requirements, pension liabilities.
- WARN Act notices and state equivalent notice requirements.
- Escrows, reserves, indemnities.
People
Related Insights
10 February 2025
Foley Viewpoints
New Consumer Financial Protection Bureau Acting Director Expands Freeze to All CFPB Activities; CFPB Office Closes
On Friday, February 7, 2025, President Trump named newly confirmed director of the Office of Management and Budget, Russell Vought, as acting director of the CFPB.
10 February 2025
Labor & Employment Law Perspectives
It’s That Time of Year Again: Using OSHA’s Injury Tracking Application to Submit OSHA Forms 300, 300A, and 301
Pursuant to the Occupational Safety and Health Administration’s (OSHA) electronic reporting regulation, covered employers must submit their OSHA injury and illness records (OSHA Forms 300, 300A, and 301) using OSHA’s electronic Injury Tracking Application by March 2, 2025.
10 February 2025
Labor & Employment Law Perspectives
Trump Administration Provides Some Guidance on DEI Programs
Following up on the Trump Administration’s series of executive orders and statements regarding diversity, equity, inclusion, and accessibility (DEI or DEIA) programs, on February 5, 2025, both the Office of Personnel Management (OPM) and the United States Attorney General Office issued memoranda reflecting additional guidance as to what may constitute an “illegal” DEI or DEIA program and directing enforcement action.