Financial support: the franchisee does not offer a formal direct or indirect financing program. HHFL, SCH or its subsidiary, General Innkeeping Acceptance Corporation (GIAC), may provide loans or guarantees. HHFL, SCH and GIAC are considering granting loans or guarantees on terms negotiated on a case-by-case basis with the potential franchisee and any decision to grant a loan or provide a guarantee would be made solely as a result of the discontinuation of HHFL, SCH or GIAC and would be subject to the approval of the Executive Committee and the Board of Directors. It is the sole responsibility of the franchisee to obtain adequate financing for all expenses related to the development, opening and operation of the hotel. Obligations and restrictions: Whether the franchisees are an individual, a company, a partnership or another entity, the franchisee requires that they retain and exercise direct control at all times over the management of the hotel`s activities, unless otherwise authorized by the franchisor. However, the franchisor does not require the franchisees to be personally involved in the direct operation of the hotel. The franchisor may include in the license conditions obliging the franchisees, a (i) duly qualified and experienced management company, acceptable to HHFL, or (ii) general manager, food & beverage manager or sales manager with at least two years` experience in such a position in a hotel operated under one of HHFL`s brands, or in a hotel in a brand segment similar to that of the hotel, as defined by Smith Travel Research, Inc. The franchisee needs franchisees experienced in management, who supervise the hotel on site or commission a management company that he has approved. A general manager who has successfully completed the franchisee`s training program must supervise the activity directly on site. Franchisees must provide the hotel services described in the license and ensure that no part of the hotel or system is used to facilitate or promote a competing business.

There are no restrictions on who franchisees can sell B&Bs or other hotel-related goods or services. Whether we cross or manage hotels on behalf of third-party hotel owners depends largely on the maturity of the market, the preference of the owner and, in some cases, the respective brand. . . .

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