USFS Supports Hotels through Hard Times

ATLANTA (November 13, 2001) – Known for its extraordinary relationship with franchisees, U.S. Franchise Systems, Inc. (USFS) has launched a franchise support initiative to assist hotels through one of the most challenging economic periods in the history of the travel industry. These initiatives will be immediately implemented for USFS hotels throughout the United States. USFS is the parent company of the franchisor of the Microtel Inns & Suites, Hawthorn Suites, and Best Inns & Suites hotel brands.

It is easy for companies to claim that they are partners with their franchisees during periods of positive economic growth, but not many live up to it during the hard times, says Mike Leven, chairman and ceo of USFS. We hope that these initiatives demonstrate to our franchisees that we are here for them when they need us most.

USFS will provide support in several areas across the board to help franchisees. There have also been additional programs developed for specific brands that are designed to either drive business for the immediate future or to provide a highly valued amenity to the brand.

Fee Deferral
Microtel, Hawthorn and Best recently offered their franchisees an opportunity to defer 50 percent of September royalty fees for nine months to be paid in June 2002. The response by franchisees to this offer has been very positive. A week after the addenda for the fee deferral to franchisees was distributed; 18 percent of Best, 31 percent of Hawthorn and 23 percent of Microtel hotels had taken advantage of this opportunity. USFS has received applause from franchisees for offering this deferral.

Frequency Programs
To enhance the brands' competitiveness in today's environment, frequency programs for Microtel and Best are slated to be introduced or updated in the very near future. Microtel guests have started signing-up for the MicroPass frequency program which will be rolled-out during the holidays along with the newly automated Best Traveler program.

Hawthorn franchisees will soon be considering a frequency initiative. Under USFS' unique franchise agreement, 66 percent of open Hawthorn hotels must vote in favor of the frequency initiative due to the nature of the program being contemplated. The voting period is expected to end in mid-December.

Strategic Work Assessment Team
While some organizations in the industry may be cutting hotel support staff during these tough economic times, USFS realizes that this is the time when hotels need help the most. During the coming months, the company is anticipating a greater need for the Strategic Work Assessment Team (SWAT) throughout the country. SWAT provides additional operational, sales and marketing assistance to properties in extraordinary circumstances. USFS will be adding staff to this important franchise support arm to triple the capabilities of the team.

Additionally, USFS has recently added and continues to add staff to its Franchise Field Support and Atlanta-based Franchise Resource teams.

Franchise Conference
In contrast to other hotel franchise companies, USFS recognizes the importance of a system wide conference and is not only holding its conference in March 2002, but is offering to waive registration fees for owners. More than 580 hotel owners are eligible to take advantage of the complimentary registration. The conference will offer valuable opportunities for business owners to learn from one another as well as attend seminars and workshops designed to help hotels through slow economic times.

Winter Rate Promotions
The winter holidays give travelers opportunities to visit with family and friends or to just explore the variety of sites across the country. Participating hotels are offering special discounted rates this season. Microtel is offering Ultimate Savings Rates as low as $32. Hawthorn is offering special Get Away for the Holidays rates Thursdays through Sundays for as little as $59. Best is offering Winter on Sale rates at such chilling prices as $39 per night.

Microtel Everybody Sells Initiative
USFS is putting the full force of more than 130 combined years of sales experience to work for Microtel hotels across the country through its Everybody Sells initiative. Senior management in addition to the Microtel franchise field support team will travel throughout the country to make local sales calls on behalf of individual hotels. The Everybody Sells team has received special training from USFS' ceo and 40-year industry veteran Mike Leven.

The Everybody Sells team is expected to make approximately 6,500 sales calls by the end of February, devoting at least three days on site making sales calls on behalf of each hotel. Instead of having the initiative end for the hotels when the sales representative leaves, USFS has designed a telemarketing effort to provide follow-up support for each hotel by a National Sales Support Team.

Hawthorn High-Speed Internet Access
Hawthorn Suites has recently added the StayOnline high-speed wireless computer system as a brand standard. The extended-stay hotel chain will feature the 100 percent wireless high-speed Internet connectivity and computer system at no cost to Hawthorn Suites hotels in North America. Hawthorn Suites hotels will be outfitted with the StayOnline wireless environment throughout each property as well as desktop computers in 20 percent of all suites and the Hawthorn Room. The installation of the system is expected to be completed during second quarter of 2002.

Best Marketing Support
For Best, an emerging brand, USFS knows that it is critical to get the word out. The company has made a significant financial contribution to the Best marketing fund for advertising activities during the year. This investment in the future of the brand is not a loan and will not be re-paid to the company.

Atlanta-based U.S. Franchise Systems, Inc. was founded in 1995 by industry veteran Mike Leven. USFS is the eighth largest franchisor worldwide by the number of hotels according to Hotels Magazine (July 2001). As of October 22, 2001, there were more than 560 properties open or under construction in 48 states and eight countries around the globe.

The Company was formed with a franchisee-focused, quick-response corporate culture that has enabled it to grow faster than any other new franchise company in the industry. USFS is the first hotel company to receive the American Association of Franchisees and Dealers Fair Franchising Seal. Acquired by business interests of the Pritzker family of Chicago in November of 2000, USFS expects to continue its aggressive expansion efforts. For more information, visit USFS online at www.usfsi.com.