Hotel Management and Operations

The newly formed entity now enters into a development contract with the development company to take the project to completion.

The development company charges a fee, approximately 3 percent of the total project cost, for this service.The agreement generallycovers such variables as:

• Selection of architect/engineers
• Selection and supervision of a general contractor
• Processing all building and occupancy permits
• Raising all the equity money from investors
• Securing a construction mortgage loan
• Selecting a franchise company
• Securing the franchise
• Selecting an interior designer that meets franchise company requirements
• Purchasing all opening furniture, fixtures, equipment
• Selecting a management company to operate the hotel
• Liability for cost overruns

HOTEL - THE DEVELOPMENT AGREEMENT