Choice Hotels Changes Franchise Agreement

Choice Hotels International, Inc. (NYSE:CHH) today announced a significant revision to its basic franchise agreement that reduces the cap for liquidated damages for terminated franchisees.

“We have worked hard to update our basic agreement and keep it competitive by reducing the cap on liquidated damages upon termination from 60 to 36 months,” said Charles A. Ledsinger, Jr., president and chief executive officer. “This revision builds on our previous changes endorsed by licensees, which implemented five-year mutual outs for franchisees in good standing and eliminated change-in-control transfer fees when the ownership interest passes to a franchisee`s heir.”

In addition to the cap reduction, Choice also announced it will offer a 15 percent discount on the liquidated damages due in the event the terminated franchisee pays the liquidated damages along with all outstanding fees and charges and removes all Choice signage and trademarks within 30 days of termination.

The company also eliminated liquidated damages for a franchisee`s non-referral of guests to another Choice brand hotel.

Choice Hotels International is the world`s second largest hotel franchisor, with almost 4,000 hotels in 36 countries marketed under the Comfort, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites hotel brands.