Franchise or Management Contract: Who Runs a Bali Hotel?

Two hotels in Bali can carry equally famous brand names and still run on completely different contracts. In one, the international group runs the hotel itself. In the other, the group lends its name, standards and booking channels, and someone else runs the building every day. For a buyer of a hotel unit, this is not legal small print. It decides who reports to you, who controls the operating budget, who repairs the air conditioning at midnight, and what happens to the operation if the brand ever leaves. This guide explains the two contracts in plain terms, compares them side by side, and shows how they apply across HQC's branded projects.

What is the difference between a hotel franchise and a management agreement?

Both contracts give a building access to a recognised brand. The difference is who runs the hotel. Accor, the French hotel group, describes its own business in two lines in its 2025 notes to the financial statements: it offers owners the right to operate their hotels under one of its brands (franchise contracts), and it may also be entrusted with managing hotels on their behalf (management contracts). The same document notes that for managed hotels Accor acts on behalf and for the benefit of the owner, as the owner's agent.

The law firm Fieldfisher puts it in one sentence in its note Hotel franchise or management agreement?: the difference lies not in what is being accessed, but in who is running the hotel.

Under a franchise, the brand supplies the system

A franchise is a licence. The owner receives the right to trade under the brand, the brand's service standards and audits, access to its reservation systems and sales channels, and its loyalty programme, whose members book within the network. In return the owner pays the fees set by the franchise agreement. What the owner keeps is operational control: hiring, purchasing, maintenance and the budget sit with the owner or with an operating company the owner appoints, within the limits of the brand standards.

Under a management agreement, the operator runs the hotel

A management agreement is a delegation. The operator takes over daily operations, implements its standards, prepares the budgets and supplies the management team, in return for management fees. Accor's 2025 notes describe these as generally a base fee linked to the hotel's revenue plus an incentive fee subject to the hotel's profitability. Fieldfisher adds that in a standard arrangement the hotel staff are often employed by the owner, while the operator recruits and supervises them and seconds senior people such as the general manager.

Franchise or management contract: a side-by-side comparison

The table summarises how the two contracts divide the work. Individual agreements vary, so treat it as the general pattern rather than the terms of any specific hotel.

What does each model mean for a unit owner?

Most buyers of a branded hotel unit in Bali never sign the franchise or management agreement themselves. That contract sits between the brand and the hotel's owning or operating company. What the unit owner signs is their own purchase documents and an agreement with the management company or hotel operator. The model behind the brand still shapes four things an owner will care about.

Who reports to you

Under a management agreement, the operator reports to the owner of the hotel business, and the unit owner usually hears from that operator. Under a franchise, the report comes from the company that actually runs the hotel; the brand's role is to check that the hotel meets its standards, not to run its accounts. Ask which entity produces your statements and which entity you can call.

Who controls costs

This is where the two models differ most. Under a franchise the operating company sets staffing, purchasing and maintenance spending. Under a management agreement those decisions sit with the operator, and the owner's leverage comes from the budget approval and performance clauses in the contract. HVS, the hospitality consultancy, notes that owners now negotiate greater influence over budget approvals, stricter performance tests and stronger termination rights in management agreements. Fieldfisher makes the same point from the legal side: performance tests, approval rights and termination provisions are the main levers an owner keeps.

Who fixes things

In either model, a branded hotel unit is maintained by whoever runs the building, not by the owner personally. The useful question is how repairs and the eventual replacement of furniture are funded. A well-run hotel sets money aside for this from the start rather than calling owners when something breaks.

What happens if the brand leaves

Brand contracts are long but not permanent. Wyndham Hotels and Resorts, which describes itself as the world's largest hotel franchising company by number of franchised properties, states in its annual report on Form 10-K that its standard franchise agreements and its standard management agreements typically run for 10 to 20 years. When a franchise ends, the brand's name and channels go, but the team that runs the hotel can stay and continue under a new flag or independently. When a management agreement ends, the operator's management, systems and seconded senior staff such as the general manager leave with the brand, and the owner has to find a new operator during the handover.

How HQC's branded hotels are structured

HQC is the only developer on Bali partnered with Wyndham, Accor and Radisson, and the only foreign developer building under the Accor brand on the island. Each property has its own agreement with its brand, and the terms differ. The general logic is the same: the brand is responsible for brand, service standards and guest flow, while operational management stays within HQC, with one exception.

• Bloom (103 hotel rooms, Ungasan): fully managed by Radisson, under BY Radisson Individuals. This is the only HQC property where a hotel operator runs the operation. See the Bloom project.
• Satori (116 hotel rooms, Nusa Dua): runs under the Accor brand on a franchise basis. Accor sets the service standards and brings guests through its channels and loyalty programme; HQC runs the operations day to day. See the Satori project.
• Ardhana hotel (58 hotel rooms, Ungasan): runs under the Wyndham brand on a franchise basis, with HQC running day-to-day operations to the brand standard.
• Aravita: carries no hotel brand and is run by HQC's own management company.

Radisson Individuals, the brand under which Bloom operates, was launched by Radisson Hotel Group in October 2020 as a conversion brand for independent hotels that join the group's platform while keeping their own uniqueness and identity, which is why the hotel keeps its own name.

Why HQC keeps operations in-house at most of its hotels

Outside Bloom, HQC does not hand management to the operator. The brand brings guests; HQC handles operations. Working under the brand gives the hotel access to the operator's terms with online travel agencies and tour operators, and to a loyalty programme that brings repeat guests and fills the property directly. Keeping operations in-house lets HQC manage the entire budget and monitor operating expenses, while the brand oversees compliance with its standards and service quality. In HQC's view the combination of the two is the stronger model for owners.

Repairs follow the same principle. Owners do not need to contact anyone when something breaks: the management company monitors each property's condition and carries out repairs itself, usually before an owner would notice. Each property's financial model includes an allocation for depreciation, covering ongoing repairs and the planned replacement of furniture.

Questions to ask before buying a branded hotel unit

• Is the brand here on a franchise or a management agreement, and who is the counterparty?
• Which company employs the staff and runs the hotel every day?
• Who prepares the operating budget, and who approves it?
• Who sends owner statements, and how often?
• How are repairs and furniture replacement funded?
• What happens to the operation if the brand agreement ends or is not renewed?
• Which documents will I receive: the leasehold agreement, the construction agreement and the agreement with the management company or hotel operator?

What the brand requires of the building itself, from room sizes to back-of-house design, is a separate question, covered in our guide to what hotel operators change in a Bali branded residence.

Frequently asked questions

Is a hotel franchise riskier for an owner than a management agreement?

Not in itself. The owner carries the business risk under both contracts. The difference is control: under a franchise the owner side runs the hotel and is accountable for the results, while under a management agreement the operator makes the daily decisions and the owner relies on the contract's approval and performance clauses.

Does the brand still check quality in a franchised hotel?

Yes. Service standards remain the brand's responsibility in a franchise, and brands audit their franchised hotels against those standards. A franchised hotel that falls short risks losing the brand.

Do loyalty programme guests book franchised hotels?

Yes. Distribution and the loyalty programme are part of what a franchise supplies, so a franchised hotel is booked through the brand's channels like a managed one.

What happens to a hotel if the brand leaves?

When a franchise ends, the brand's name and channels go, but the team that runs the hotel can stay and continue under a new flag or independently. When a management agreement ends, the operator's management and seconded senior staff leave with the brand, and the owner has to find a new operator. Wyndham reports that its standard agreements typically run for 10 to 20 years.

Who manages HQC's hotels?

Bloom is fully managed by Radisson. Satori and the Ardhana hotel run under the Accor and Wyndham brands on a franchise basis, operated day to day by HQC. Aravita is run by HQC's own management company.

Does a Bali hotel unit owner sign the franchise agreement?

Usually not. The brand agreement sits between the brand and the hotel's owning or operating company. The unit owner signs their purchase documents and an agreement with the management company or hotel operator.

To see how this works across HQC's portfolio, read why investors choose HQC, or talk to the HQC team and ask for the management documents of the project you are considering.