BlueMauMau reports that It seems that not all is clean and good at Marriott. CNBC explores the Marriott Empire in its hour-long “Behind the Closed Doors of Marriott.”
In the three minute video clip* below, one large franchise owner explains his lawsuit regarding legal traps, bad faith, fraud, breach of contract and hidden rebates to vendors in the relationship between franchisor Marriott and hotel franchisee. His lawsuit dragged on for years in the courts. Marriott finally settled.
When it comes to Marriott and the hotel owners who fly its flag: “It’s Marriott’s way or the highway,” says franchisee Laurence Geller about three of his hotels in Southern California involved in the lawsuit. The implication is that despite good intentions, that sort of power without proper checks and balances can corrupt the franchisor, no matter how good the stock that it and its founders come from.
“You can’t have an unhappy marriage in a $400 million dollar hotel,” explains franchisee Geller on why Marriott is insulated from more lawsuits. At this business size, it is not so much the fear that defending against corporate lawyers is expensive that dampens franchisee lawsuits. Rather, Marriott franchisees are very reluctant to rock the boat that keeps them afloat. In other words, owners will tolerate a great deal of abuse if they have too much to lose in a largely profitable business.
A Wall Street Journal article of 2012 that describes the then just started lawsuit states: “The suits against Marriott, as well as some other major hotel chains, have been piling up as owners are increasingly asking for a larger share of profits and a bigger say in the way their hotels are run.”