Explanation

The system is well-established and shows slow but steady growth in the number of franchised units over the past three years. This mature and controlled growth pace does not suggest that the franchisor's support resources are being stretched too thin, which is a positive indicator for system stability and the ability to provide adequate franchisee support.

Potential Mitigations

• Your business advisor should confirm that the franchisor's support infrastructure is scaling appropriately with any new unit growth.
• Speaking with recent franchisees can provide your attorney with insights into the current quality and responsiveness of the support system.
• An accountant can review the franchisor's financial statements to ensure resources are being allocated to support functions.

Explanation

This risk was not identified. Westin is a globally recognized brand, and the franchisor, as part of Marriott International, Inc., has extensive experience in the hotel industry and franchising. The system is mature and well-established, with a long operational history and significant brand recognition. The franchisor is not a new or unproven entity.

Potential Mitigations

• To understand the specific market positioning of this brand, consider commissioning a feasibility study with a specialized hospitality consultant.
• Engaging a business advisor can help you develop a business plan that leverages the brand's established reputation.
• Your attorney should still review the FDD for any recent changes in ownership or strategy that might affect the system's direction.

Explanation

This risk was not identified. The Westin brand and the hotel industry in general are well-established and not based on a short-term trend or fad. The business model relies on sustained demand for travel, lodging, and hospitality services, which has proven to be a long-term market. The franchisor is a major, established player in this mature industry.

Potential Mitigations

• A business advisor can help you analyze long-term trends in the specific segment of the hotel industry in which you plan to operate.
• It is wise to have your accountant help you create financial projections that account for typical economic cycles affecting the travel industry.
• Your real estate professional should assess the long-term viability of your specific location for a hotel business.

Explanation

This risk was not identified. Item 2 shows that the key executives, who are part of Marriott International, Inc.'s leadership, have extensive and long-term experience in the hotel and franchising industries. This experienced management team reduces the risks associated with unproven leadership or a lack of understanding of the complexities of managing a large franchise system.

Potential Mitigations

• A business advisor can still help you research the public reputation and track record of the key executives listed.
• When speaking with current franchisees, it's still valuable to ask about their direct experiences with the management team's accessibility and decision-making.
• Your attorney can help you understand the management structure and the roles of the key individuals responsible for the franchise system.

Explanation

This risk was not identified. The franchisor, MIF, L.L.C., is clearly identified as a subsidiary of Marriott International, Inc. (MII). The FDD provides the audited financial statements for the franchisor entity as required. While these financials show a heavy reliance on the parent company, the relationship and structure are disclosed, and there is no indication that a necessary parent guarantee or parent financials have been improperly withheld.

Potential Mitigations

• Your accountant should review the provided financials and footnotes to understand the relationship between the franchisor and its parent.
• It remains important for your attorney to confirm if any guarantees from the parent company exist or are necessary for the franchisor to meet its obligations.
• A business advisor can help you research the public financial health and stability of the parent company, Marriott International, Inc.

Explanation

This risk was not identified. Item 1 discloses the franchisor's history and indicates that affiliates of the current franchisor have been involved with the Westin brand for a long time. There is no mention of predecessors from which assets were acquired in a way that would obscure negative historical information. The litigation and bankruptcy history provided in Items 3 and 4 pertains to the current franchisor and its parent.

Potential Mitigations

• It is good practice for your attorney to confirm the corporate history through public records to ensure no undisclosed predecessors exist.
• In discussions with long-term franchisees, you can inquire about the history of the brand and any previous ownership structures.
• Your business advisor can research the brand's history to check for consistency with the FDD's disclosures.