Atlanta-Franchisees of Suburban Lodges of America believe in their brand-so much so that all 19 of them banded together to purchase the brand from a new owner that didn't want to be in the franchising business.

"It was in our best interest to do what we've done and more or less secure [Suburban Lodges'] destiny," said Bill Bowen, chairman of Atlanta-based Premier Hotel Corp., Suburban's largest franchisee with nine owned properties and 12 managed properties in its 25-hotel portfolio.

"Just the fact that that group of 19 could get together at that level shows they're committed to the Suburban Lodges concept," said Kevin Lewis, the new president of Suburban Franchise Systems. "They have common interests and common goals, and I understand what they want."

The 19 franchisees formed Suburban Franchise Holding Co. LLC to purchase Suburban Franchise Systems and GuestHouse International Franchise Systems from InTown Suites for an undisclosed sum. That transaction followed InTown Suites' purchase of the two franchise systems and their parent company, Suburban Lodges of America Inc., for $8.25 per share in addition to a proportionate interest in a liquidating trust. Suburban Franchise Holding Co. then sold the common stock of GuestHouse International to Hendersonville, Tenn.-based Sholodge for an undisclosed sum.

All three deals closed on May 1.

Lewis, formerly the president of GuestHouse International, was immediately named president of Suburban Franchise Systems, which will begin operation with 62 properties.

Lewis said the opportunity to join the new company was welcome professionally and personally.

Lewis :
"I'm familiar with the brand, and it's got a lot of growth potential in a very hot segment," he said. "I've moved often, and I have four kids. The opportunity to stay in Atlanta and the opportunity to be in a niche that's hot right now were perfect for me."

Bowen said the group of franchisees realized in the fall of 2001 the potential existed for them to band together and buy the franchising portion of Suburban Lodges.

The franchisees formed Suburban Franchise Holding Co. to take care of the acquisition. Six franchisees serve on the holding company's board of directors: Bowen, Al Scott of Omnicorp Resources in Atlanta, Bill Hargett of AFCO Realty in Atlanta, Bill Henderson of Homestyle Inns in Atlanta, Mark Daley of The Generation Cos. in Research Triangle Park, N.C., and Joe Harman of SLD Properties in Atlanta.

Bowen said all 19 Suburban Lodges of America franchisees have an ownership stake in the holding company. He said part of the reason the franchisees wanted to rescue the brand from potential dismantling is the excellent investment opportunities it has provided them.

"The budget extended-stay product is different than others because of its low employee count, its limited marketing, its low guest turnover and its consistent occupancy," Bowen said. "The model

is a good model when handled properly."

Bowen said Lewis is the perfect fit as president because he understands franchising.

"Kevin has the personality and the integrity for dealing with franchisees," he said.

Bowen said the new Suburban Lodges is going forward with its plan to begin franchising immediately.

"By and large, we're good to go," Bowen said. "For the most part, we're open for business in terms of selling franchises."

However, he said the company will proceed at a cautious pace.

"We don't want to grow for the sake of growing," Bowen said. "Picking the right sites and the right franchisees is very important."

Lewis said the new company will be ready to conduct franchising business by mid-June.

"Development is a high priority," Lewis said. "We also have to re-evaluate the current offering of services-we'll take a hard look at some of the marketing efforts.

"We have a strong Southeast presence," Lewis said. "We'll leverage off the name recognition and build out from there."

Bowen said the growth plan will focus on new-construction properties, but it will consider conversions on a limited basis.

Daley, whose company owns and operates six Suburban Lodge properties, said interest in the new company has been high.

"The board agreed to pursue an accelerated growth strategy in large part because of the renewed interest we've gotten from both lenders and developers," Daley said. "We've got a strong management team in place to grow the brand aggressively."

Bowen and Daley said the new company offers franchisees a unique opportunity in an industry that is becoming increasingly dominated by larger franchisors.

"We have a strong franchisee-oriented philosophy, and that will stay no matter what happens," Daley said.

"If there's ever been a franchisee-friendly franchising company, this is it because it is owned by franchisees," Bowen said.

Suburban Lodges Franchisees Band Together to Purchase Brand