Get All Access for $5/mo

Hilton Going Public: Good or Bad for Franchisees? While going public is certainly a big change for the company, its global franchisees will likely not have to worry.

By Kate Taylor

Opinions expressed by Entrepreneur contributors are their own.

In a move that could impact its franchisees, Hilton Worldwide Holdings filed for an initial public offering worth up to $1.25 billion on Thursday.

Hilton, whose properties include Hilton Hotels and Resorts, Doubletree by Hilton and Hampton Hotels, was taken private by Blackstone Group in 2007 for more than $18 billion and an additional $7 billion in assumed debt. The company has seen solid growth these last few years, posting revenue of $9.3 billion in 2012, up 5.6% from 2011 and up 15% from 2010, according to the IPO filing with the Securities and Exchange Commission.

Hilton's global franchising strategy has been key to its success. By licensing the Hilton brand to franchisees through a variety of Hilton Worldwide brands, Hilton has managed to create lower-risk and more profitable properties than those it operates itself. The company has grown to become one of the largest hotel chains in the world, with more than 4,000 properties in 90 countries and territories.

Related: Papa Murphy's, Wingstop Expanding Franchises to the United Arab Emirates

While going public is certainly a big change for the company, its global franchisees will likely not have to worry.

Bill Carroll, senior lecturer at the Cornell University School of Hotel Administration and analyst for PhoCusWright, argues that going private gave Hilton a chance to grow and become more effective without being under the "financial microscope," and that going public now could offer new opportunities for growth. With the return to the competition and increased transparency of the public marketplace, franchisees may be offered better loyalty programs than when the company was private. Competing directly with Marriott International and Hyatt Hotels could increase pressure to attract new franchisees, he says.

Carroll doubts much will change in the global franchising strategy, considering how important it is to the company's success. "Why would they back away from it?" he asks.

Still, even if Hilton were to make a significant change to its franchising strategy, its franchisees likely wouldn't have much of a say. "Hilton can change how the company operates at will," says Stanley Turkel, a hotel and franchise analyst. "Franchises are the one place in business where you can be bought and sold without any say."

Related: Taxes, Healthcare and Immigration: A Preview of the 2013 IFA Public Affairs Conference

Kate Taylor


Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business Solutions

Increase Productivity with This Microsoft 365 Subscription, Now $25 Off

It can make the entrepreneur life a lot easier.

Business News

Apple Pay Later Is Ending. Here's What's Taking Its Place.

The program was available for less than a year.


This Artist Answered a Businessman's 'Powerful' Question — Then His Work Became 'the Poster Child for Juneteenth': 'Your Network Really Becomes Your Net Worth'

Reginald Adams was the executive director of a Houston-based art museum for more than a decade before he decided to launch his own public art and design firm.


Harvard Business School Professor Says 65% of Startups Fail for One Reason. Here's How to Avoid It.

Team alignment isn't nice to have -- it's critical for running a successful business.

Business News

Here's What Companies Are Open and Closed on Juneteenth 2024

Since it became a holiday in 2021, Juneteenth has been recognized by some major corporations as a paid day off.

Growing a Business

I Hit $100 Million in Annual Revenue by Being More Transparent — Here Are the 3 Strategies That Helped Me Succeed

Three road-tested ways to be more transparent and build relationships that can transform your business — without leaving you feeling nightmarishly over-exposed.