THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

Corporation in 1992 under the HFS name. It then further acquired
Super 8 for another $120 million, making it the world's largest hotel
franchiser. Silverman explains that few people understand the
advantages of being a franchiser instead of an outright owner. The
franchiser provides advertising for the brand name, runs the
reservation systems and supplies training and inspection on the
franchisees. In short, the franchiser handles only the clean
information aspects and is paid a hefty, predictable fee for it. It leaves
all the messy and unpredictable aspects to the franchisees, such as the
changes in value of the real estate, the continuous maintenance and
upgrades needed the fluctuations of customer flows and all the
labour-intensive components.
Silverman also made some other, seemingly unrelated, acquisitions,
such as Century 21, ERA and Coldwell Banking in 1995. This made
HFS the world's largest franchiser of residential real estate. Later he
also acquired PHH, a conglomerate of corporate relocation and
financial services, for $1.8 billion. But the dearest demonstration of
the underlying strategy was the handling of the acquisition of Avis
car rental for 8800 million. Even before the deal was closed, HFS
announced that it would be taking the second-largest car rental
company public. It would sell off Avis's 174,000 vehicles, 20,000
employees, and 540 car rental locations to the public. The only thing
that HFS kept for itself was Avis's information and reservation
system, which it would run for a nice predictable charge, and of
course the Avis brand name for further licensing. As Wall Street has
not yet named this Strategy, I propose the term 'information asset
stripping'.
As a consequence, between 1992 and 1997, HFS's total revenues
multiplied by a factor of 10, to s2 billion, and its net profits multiplied
by Howard Johnson. For these, $170 million was paid, and for Days
Inn, B295 company public. It would sell off Avis's 174;000 twenty, to
8475 million. But the most valuable asset is the psychographic,