Income basis
- Lease
- Contracted rent, fixed and/or variable
- HMA
- Operating earnings after costs and fees
- Revenue Share
- Share of a defined revenue stream
- Franchise + operator
- Operating earnings after brand and operator costs
Operating ModelThe structure should
The structure should
serve the asset.
Compare lease, HMA, revenue share and franchise with a third-party operator against owner income, trading risk, control and capital obligations.
Explore the options
Rental income. Operator-led delivery.
Lease
An operator leases the property and runs the accommodation business. Rent may be fixed, variable or a combination, as negotiated.
Owners prioritising rental income and a defined separation from day-to-day operations.
Owner income
Rent under the agreed lease; it may include turnover-linked components.
Commercial exposure
The operator generally carries trading exposure. The owner still faces tenant covenant, vacancy and agreed property obligations.
Control & approvals
Control is principally exercised through the lease terms, permitted use, reporting and property standards.
Terms to examine
Operator covenant, security, rent reviews, capital responsibilities and handback.
Can the proposed rent survive a weaker trading year, and who funds the asset when it needs work?
These are commercial starting points. The agreement determines the actual allocation of obligations and risk. Model selection needs an asset-specific assessment and advice from appointed specialists.
At a glance
Compare the models.
Income, trading risk, operating delivery and the key owner tests.
| Owner question | Lease | HMA | Revenue Share | Franchise + operator |
|---|---|---|---|---|
| Income basis | Contracted rent, fixed and/or variable | Operating earnings after costs and fees | Share of a defined revenue stream | Operating earnings after brand and operator costs |
| Trading exposure | Generally carried by the tenant; owner retains covenant exposure | Typically retained by the owner | Depends on expense and deficit allocation | Typically retained by the owner |
| Operating delivery | Tenant operator | Appointed hotel manager | As allocated by the agreement | Separate operator under brand requirements |
| Key owner test | Rent sustainability, security and handback | Fee alignment, approval rights and performance | Revenue definition, deductions and expenses | Total fee stack and alignment of both agreements |
Typical structures; actual terms vary. All four models are shown under each owner question.
Trading exposure
- Lease
- Generally carried by the tenant; owner retains covenant exposure
- HMA
- Typically retained by the owner
- Revenue Share
- Depends on expense and deficit allocation
- Franchise + operator
- Typically retained by the owner
Operating delivery
- Lease
- Tenant operator
- HMA
- Appointed hotel manager
- Revenue Share
- As allocated by the agreement
- Franchise + operator
- Separate operator under brand requirements
Key owner test
- Lease
- Rent sustainability, security and handback
- HMA
- Fee alignment, approval rights and performance
- Revenue Share
- Revenue definition, deductions and expenses
- Franchise + operator
- Total fee stack and alignment of both agreements
Commercial questionsThe details decide
The details decide
the fit.
Gopherwood creates a common brief, compares the economics and supports the commercial discussion alongside your appointed advisers.
Brand, operator & deal advisoryIs a third-party operator a separate operating model?
It describes who delivers the operations. The underlying commercial arrangement may be an HMA, lease or revenue share. A franchise can provide brand affiliation alongside a separately appointed operator. Each agreement needs to allocate responsibility clearly.
Does a lease guarantee the owner’s return?
A rent obligation still depends on the agreement, tenant covenant and payment performance. Security, repair obligations, capital requirements, default rights and handback conditions all need examination. Fixed rent is not the same as risk-free income.
Why can a revenue-share percentage be misleading?
The percentage needs a defined base. Gross revenue, net revenue, exclusions, commissions, operating expenses, capital costs and deficit funding can materially change the cash outcome. Compare the complete economics.
Can Gopherwood help with operator selection?
Yes. We can scope the ownership brief, prepare an expression of interest, assess suitable parties, compare proposals and support commercial discussions. Legal documentation is handled by appointed counsel.
A structure developed by TJLanchise.
Lanchise.
Lease + Franchise.
TJ’s Lanchise concept brings a lease-based operating arrangement together with a hotel franchise: the operator leases the asset and runs the business under an agreed brand affiliation.
It creates a pathway to combine rental income for the owner, an accountable operating partner and the distribution, systems and standards of a recognised brand. The lease and franchise need to work together on fees, capital, brand approvals, performance and exit.
Lanchise describes the commercial concept. The negotiated agreements determine each party’s obligations and risk; suitability is assessed for the asset.
Discuss whether Lanchise could fitA confidential first conversationLet’s talk about your next
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