Choice Realigns Franchise Services, Franchise Sales, Brand Management & Reservation Operations

SILVER SPRING, MD (November 14, 2001) - Choice Hotels International, Inc. (NYSE:CHH) today announced a corporate realignment designed to provide sharper strategic focus on delivering value-added services to franchisees, growing the Choice hotel system and building stronger brands. As a result of the realignment, Choice will take a charge of approximately $5.0 million, or $0.07 per diluted share, related to this restructuring in the fourth quarter.


The company estimates that the changes in corporate overhead will result in annual savings of approximately $2.5 million and that the changes in brand management and reservations will produce annual savings of approximately $4.0 million in the operations of the marketing and reservations funds.


As part of the company`s ongoing drive to provide franchisees with value-added, performance enhancing services, Choice is creating a centralized Franchise Services department that will replace its existing Market Area structure.


“By having a single point of accountability for franchise services, we can create more integrated and consistent service delivery,” said Charles A. Ledsinger, Jr., president and chief executive officer. “As a result, we will close our Market Area offices in Charlotte, North Carolina, and Golden, Colorado, and consolidate their Help Desk functions into a single, enhanced operation.”


Ledsinger added that no change is expected in either the number of franchise service staff in the field or the number of hotels each serves, which is currently the lowest per director in the industry.

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The company announced that its Board of Directors has appointed Janna Morrison as senior vice president, Franchise Services. She previously served the company as vice president, Property Systems.


At the same time, Choice has revamped its Franchise Sales department by creating four team leaders with more focused sales territories and brand coverage and reducing the number of sales associates. In the Brand Management area, the company has named Thom Hall as vice president, Brand Management & Strategies to oversee and coordinate four brand teams and provide strategic focus on the future direction for the brands and their development. He previously served as vice president, Emerging Brands.


“These realignments in service delivery, franchise sales, brand management and reservation operations strengthen Choice`s ongoing efforts to grow more strategically and operate more productively while containing the costs of our overhead structure,” said Ledsinger.


Morrison joined the company in 1987 as a marketing and sales support director. She has progressed through a series of marketing and revenue management positions and is responsible for the successful deployment of Profit Manager, the company`s proprietary property management system, to more than 2,500 domestic hotels. A graduate of Iowa State University, she was elected a corporate officer in September 2000.


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