HOLIDAY INN: Protest Site Targets Franchisee Kronos Hotels

October 12, 2008 Franchise Publicity

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We’ve recently been reporting on the woes of troubled Holiday Inn franchisee Kronos Hotels LLC, an Atlanta-based hotel chain founded by its chief executive officer, Malaysian entrepreneur Charles Morais. A Franchise Pick reader and ex-employee of the hotel directed us to a protest site linking to negative news articles about the franchise group and calling for its demise: KronosHotelsllc.com

According to Lancaster Online, the woes of the overextended hotel group is worsening:

– The Lancaster, PA location was stripped of its Holiday Inn franchise Oct. 1.

– Holiday Inn franchise agreements have been revoked for Kronos-owned hotels, in Lansing, Mich., and Greentree, near Pittsburgh.
– Lancaster County filed suit Kronos Hotels and Resorts LLC, seeking $38,747.42 in back taxes.
– “Employees at two other Kronos-owned hotels in Pennsylvania said FBI agents had been interviewing employees at those facilities.”

– “Dothan (Ala.) Eagle newspaper reported workers at two Kronos-owned Quality Inns there walked out and picketed the hotel because their paychecks have been bouncing.
– “Cedar Rapids, Iowa, KCRG-TV9 ran a story that said the state’s revenue department is filing additional liens against a Kronos-owned Crowne Plaza Five Seasons to recover $418,844 in back sales taxes. Friday, police were called to the Iowa hotel when more than 30 employees refused to leave the facility after their paychecks bounced.”
– “the St. Charles County Convention and Sports Facilities Authority sued the Kronos-owned Holiday Inn Select in St. Peters, just outside St. Louis, to recoup $37,000 in back taxes. According to KMOV-TV in St. Louis, which broke the story, local banks haven’t been honoring workers’ paychecks. In addition, employees discovered they had no medical insurance, even though premiums were deducted from checks.”
– “…employees of the Kronos-owned Clarion Inn in DuBois [PA] said their paychecks also bounced Thursday.”
– “Saturday morning, WMGT-TV in Macon, Ga., reported a Ramada Plaza owned by Kronos in downtown Macon owes $21,000 in property taxes for 2007 and $25,000 to the city of Macon for its hotel/motel tax. The facility also was without hot water from Oct. 1-3 because it did not pay its gas bill, and the Macon Water Authority said it has almost cut off service three times in the last six months.”
– “In Sheffield, Ala., Mayor Billy Don Anderson told city council Tuesday his city endorses the utility department’s decision to shut off power to a Kronos-owned Holiday Inn hotel after it failed to pay utility bills, according to the Sheffield Times Daily.”

While Kronos spokesman Peter Mathon blamed the company’s woes on “America’s current financial environment,” employees, the press and industry groups aren’t buying it. According to reports, Kronos-owned hotels started having trouble “within a month of the company’s purchase of 16 hotels in June 2007, and eight more in April 2008.”

Employees and industry observers blame Kronos’ woes on overexpansion and poor management.
Information source: Room at the inn for more violations by Chip Smedley

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