COCO, FOCO, AND FOFO: WHAT'S THE RIGHT PICK?
Hotelier India|August 2021
Choosing the business model will largely depend on the capital available, growth trajectory, development stage, and brand name
ABHAY VOHRA

COVID-19 put several businesses across verticals in a tailspin. Amongst these, the hospitality industry has been one of the worst-hit, particularly at the outset of the crisis.

Towards the latter half of 2020, the industry moved swiftly to mitigate the impact on business by reducing costs, pivoting to digital platforms, and overall recalibrating their business models to adapt to the current scenario. However, the impact and devastation the pandemic has left in its wake are sizeable and likely to be long-lasting.

While hotels and operators are yet to make a full recovery from the plummeting economy, the pandemic’s second wave brought new challenges to the fore. For instance, OYO Hotels and Homes, which was valued at $9 billion after a fresh infusion of capital, faced a petition filed by a creditor who initiated insolvency proceedings against the organisation.

Later the Delhi High Court had ordered that issue had been resolved as the petitioner specifically stated the same and thus withdrew the petition. Such cases set poor precedence of coercing startups, regardless of whether they are unicorns or not, into paying a debt.

Now, the million-dollar question is, what is the ideal business model that industry players can adopt and what is the way forward? Before we delve into the answer, one needs to gain an understanding of the three main franchise business models present in the hospitality and real estate segments.

UNDERSTANDING THE BASICS

Company Owned Company Operated (COCO), Franchise Owned Company Operated (FOCO), and Franchise Owned Franchise Operated (FOFO) are the three main business models. In the COCO model, companies often take long-term leases of the property and operate it since purchasing is often not feasible.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM HOTELIER INDIAView All

What's In Store For Hotel Management Companies?

As trust becomes the key currency, hotel owners will place higher value on transparency, making hotel management companies responsible for everything – from employment practices to marketing messaging

4 mins read
Hotelier India
November 2021

How 5G Will Power Up The Hybrid Workplace?

Significantly higher internet speeds and enhanced connectivity will transform how teams can collaborate online

4 mins read
Hotelier India
November 2021

THE SHORT SQUEEZE

Replacing toothpaste tubes with tabs can enable the hospitality industry to take a huge cooperative step forward towards sustainability

3 mins read
Hotelier India
November 2021

TAKING OFF

Short-haul helicopter service is uplifting pilgrimage and leisure travel - offering convenience, comfort and access to hard-to-reach destinations.

4 mins read
Hotelier India
November 2021

LOOKING UNDER THE HOOD

Rather than chart ambitious strategies in boardrooms, BWH Hotel Group’s Incoming President and CEO, Lawrence Cuculic prefers getting into the trenches to better understand team and partner expectations

7 mins read
Hotelier India
November 2021

WOWED BY THE PAV

Optimum utilisation of space, efficient workflow management, innovative menu planning – that is how Jumboking’s Dheeraj Gupta gave the humble vada pav a contemporary makeover

4 mins read
Hotelier India
November 2021

MIND YOUR WORDS

The hospitality sector can future-proof itself in the post-pandemic world by investing in their employees’ communication and soft skills

4 mins read
Hotelier India
November 2021

INDIA'S TRAVEL MARKET TO TOUCH $125 BN BY FY 2027

Over 3 lakh agents are expected to cater to over $65 billion of the overall market size during this period, according to Redseer

1 min read
Hotelier India
November 2021

HOW DIGITAL TRANSFORMATION IS FACILITATING SERVITISATION

Today, guests expect a consumer-centric hotel experience from the word go, including while choosing a destination. They also want new experiences, faster customer service, the utmost comfort – the list continues to grow. How can hotel operators meet these needs?

4 mins read
Hotelier India
November 2021

CARVED FROM CARDBOARD

Using cardboard furniture can help hospitality operations become more efficient, especially in events and outdoor spaces, since it can be quickly assembled, dismantled or transported

3 mins read
Hotelier India
November 2021
RELATED STORIES

ओयो कर रही 1.5 अरब डॉलर के निर्गम की तैयारी

कंपनी द्वारा 14 से 16 अरब डॉलर के मूल्यांकन दायरे में 1.2-1.5 अरब डॉलर की पूंजी जुटाए जाने की संभावना है

1 min read
Business Standard - Hindi
September 09, 2021

ओयोः वृद्धि को रफ्तार देने पर नजर

कंपनी अगले चरण के विकास की तैयारी के लिए कारोबारी मॉडल में कर रही बदलाव

1 min read
Business Standard - Hindi
August 06, 2021

"मेरे पास सिर्फ 30 रु.ही बचे थे...

संस्थापक और सीईओ, ओयो रूम्स 10 अरब डॉलर का अनुमानित कारोबार, दुनिया के 80 देशों में फैले 43,000 होटलों और 1,50,000 वैकेशन होम्स का नेटवर्क तैयार किया

1 min read
India Today Hindi
January 06, 2021

Explainer: How has the pandemic changed travellers' hospitality demands?

The pandemic is revealing that people are not looking to experiment and prefer staying at tried-and-tested properties

3 mins read
Gulf Business
October 2020

Designing a characteristic facility for WorkFlo by Oyo

What’s characteristic about the co-working space, in Hyderabad, is how Beyond Design Architects have subtly combined different decor styles into a holistic working environment

3 mins read
Commercial Design
June 2020

THE DAY AFTER COVID-19

India is hit hard due to the spread of this pandemic situation which has called for a sudden and extended nationwide lockdown and has put every lives of India into a standstill.

4 mins read
Northeast Today
May 2020

A HOST OF TROUBLES

OYO’s Ritesh Agarwal had much to contend with: conflict with partners, the fallout from rapid geographical expansion, and internal restructuring. Then came a pandemic, giving the founder of one of India’s most-valued startups his most difficult battle yet.

10+ mins read
Fortune India
May 2020

ओयो ने किया वेतन कटौती का प्रस्ताव

कंपनी ने सभी कर्मचारियों को 25 फीसदी कम वेतन लेने के लिए कहा, कुछ को अगस्त तक छुट्टी पर जाने के लिए कहा

1 min read
Business Standard - Hindi
April 23, 2020

MYSTERY OF THE OYO ROOMS

WHY THE FASTGROWING HOTEL CHAIN HAD TO SCALE DOWN

10+ mins read
Business Today
March 08, 2020

Ritesh Agarwal - The Self-Made Billionaire

First-generation entrepreneur Ritesh Agarwal’s feat of turning his start-up into the world’s third-largest network of hotels, accommodation options and managed living and work spaces is truly amazing. What’s more amazing is that the college dropout, who is just 25 now, has achieved all this from scratch and in six years flat! We bring the story of his incredible journey of building OYO Hotels & Homes.

7 mins read
MARWAR India
September - October 2019