HENDERSONVILLE, Tennessee—After a three-year legal battle and a slow relaunch earlier this year, Boomerang Hotels’ CEO Brendan Watters can finally wash his hands of the Shoney’s Inn and Shoney’s Inn and Suites franchise.
The master brand and parent company Boomerang Hotels has ceased the re-launch of the Shoney’s franchise and will sell the brand back to Shoney’s North America Corporation, its original owners. Boomerang will continue to develop and franchise GuestHouse International and Settle Inn brands.
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Brendan Watters CEO Boomerang Hotels |
Watters was not able to disclose the terms of sale for the deal.
Asked today if it feels good to put the roller-coaster ride that has been Shoney’s behind him, Watters said, “You have no idea. Yes. It is in the best interest of our company to move on with our two brands.”
The Shoney’s Inn brand was under a development moratorium from 2007 to January of this year after a lawsuit was filed over licensing terms. In January, the Tennessee Court of Appeals affirmed GuestHouse’s right to franchise Shoney’s Inn hotels, and GuestHouse reintroduced the Shoney’s Inn brand to the market.
“We’d signed up several, so we had two open and several others that we had signed contracts and applications,” Watters said. “But it’s much easier to manage something that you own outright.”
Watters said the hotel owners who were interested in the Shoney’s brand will convert to either GuestHouse International or Settle Inn.
At one point, the Shoney’s Inn portfolio boasted more than 80 properties in the Southeastern United States and benefitted from the popularity of the similarly branded restaurant chain. At the time of relaunch, Watters planned to add approximately 10 locations a year, still concentrating on the Southeast. He said the restaurant chain and the hotel chain remained unaffiliated but would benefit from each other’s name recognition.
Boomerang’s pipeline
Boomerang operates more than 6,500 rooms in the U.S. with two GuestHouse International properties in China. Watters said Guesthouse in 2011 had the best start to a year in four years, signing on 10 new properties in the first six months.
“Our pipeline looks like the second half of the year is going to be even better,” he said. “GuestHouse has been strong all along; we’ve got another one opening up next week and another two applications in. The fact that GuestHouse is doing so well was also a very strong reason for me to sell the Shoney’s brand.”
Watters said in January he expected the economy segment to benefit from travelers still seeking value.
“Our low brands have seen more of a solid basis recently,” he said. “We’ve definitely seen an uptick, and forward bookings are looking better than they have for the last three years.
“People are so value-oriented that a good solid economy brand is still going to do very well,” Watters continued. “I don’t look at the economy segment and say it’s performing worse than everyone else; they all have been so bad.”