FairBridge Inns adds loan option for hotels
FairBridge Inns partners with Texas financing firm to help affiliate propertiesDecember 20th, 2012
FairBridge Inns LLC, a Spokane-based hospitality company that offers hotel branding and management services, has partnered with a business financing company, Texas-based Ascentium Capital LLC, to provide hotel owners with loans for rebranding and property improvements.
FairBridge Inns, doing business as FairBridge Hotels International, says that hotel owners who sign contracts with its 16-member affiliated hotel group can apply for between $5,000 and $250,000 in loan financing toward upgrade costs while assuming the new brand.
Skyler Reep, a Spokane-based FairBridge manager, says the hospitality company has added seven hotels to its group of properties for which it provides branding and other services, and hopes for further expansion with the new financing option.
"Obviously, we're just hoping to expand more rapidly," Reep says. "Even in this current economy, we did add seven properties for calendar year 2012, so that was our best year. We certainly hope a funding opportunity such as this will allow us to grow even more in 2013."
Founded in 2009, FairBridge charges its brand-affiliated hotels a monthly flat fee of $28 per room to provide branding and management support, including reservation services, marketing, and pricing strategies, Reep says. The properties have independent owners, and FairBridge currently doesn't own any hotels, Reep says.
"We don't have franchise fees," Reep adds. "Our model is a little different from a franchise. It's a brand fee, a flat fee based on the number of rooms for the hotel property."
He says FairBridge doesn't require newly contracted properties to undergo a checklist of upgradessuch as a certain kind of mattress or carpetingin order to become a FairBridge-affiliated site, but he adds that many owners want to make improvements when they take on a new name.
FairBridge, with headquarters in the Paulsen Center, at 421 W. Riverside, employs a total of 12 people, including six in Spokane and others in full-time sales positions based in other states. The majority owners involved in day-to-day operations are Sumeet Kals, Suminder Kohli, and Frederick Schoener. Schoener is based in Spokane, and Kals and Kohli are in California, Reep says.
The hospitality company provides branding and other services to a 79-room FairBridge-affiliated hotel in Spokane, at 211 S. Division, and a 99-room property in Post Falls, at 3647 W. Fifth. Other affiliated properties are in Leavenworth and Pasco, Wash., as well as 11 in six other statesMinnesota, Illinois, Wisconsin, Georgia, New Jersey, and California. The most recently added property that became part of the group in June is a 141-room hotel in Niagara Falls, Ontario.
In addition to the FairBridge Inns name, other brand names under which the hotels in the group operate include Dumont Inn and Loyalty Inn.
Reep adds that the hospitality industry's business description for companies offering hotel brand and management support is sometimes called a membership model, and it's an option for properties to consider other than becoming a hotel franchise site or remaining independent.
"Hotel franchise fees can be in the six figures per year," Reep says. "In this economy, this membership model is attractive to hotel owners who want a brand or a sign."
Ascentium Capital provides financing for capital expenditures to small businesses nationwide, a press release says. It's backed by Vulcan Capital, the private investment group of Microsoft Corp. co-founder Paul G. Allen, as well as by a group of investors led by LKCM Capital Group LLC, an investment vehicle for Luther King Capital Management.