HENDERSONVILLE, Tennessee—A three-year disagreement over the Shoney’s Inn hotel brand has been settled and parent company Boomerang Hotels says it is the “perfect time to bring the name back” as it plans a relaunch.
Boomerang, parent company of Settle Inn & Suites and GuestHouse International, has been in court battling for licensing rights to the Shoney’s Inn name since 2007. At that time, Boomerang went public with plans to beef up the Shoney’s Inn portfolio but was sued by the company that owned the Shoney’s restaurant chain.
Now, a Tennessee appeals court has given Boomerang the rights to move forward and CEO Brendan Watters has outlined plans for the brand.
“The industry is starting to see a slow but positive recovery,” he said. “What better time to reintroduce a great name and great license agreement.”
Watters said he would like to see the company add 10 or more properties a year in the Southeast region of the United States.
“I don't see this as a national brand, but rather a very strong regional player that complements GuestHouse International and Settle Inn,” he said.
Watters said Boomerang is currently developing a new website for Shoney’s Inns, and an integrated reservation service and classroom and on-site training. Shoney’s Inns will be part of the Boomerang Returns guest loyalty rewards program.
Boomerang operates under what it calls “friendly” franchising agreements, offering lower fees. Currently, it operates more than 6,500 rooms in the U.S. and two GuestHouse International properties in China.
The Shoney's Inn chain was established by the Shoney's restaurant company in 1975. In 1991, the restaurant company sold the hotel division, but continued to collect royalty payments on its name.
In the late ’90s, the restaurant chain fell upon hard times and eventually took a lump-sum payment of US$5.25 million in lieu of any future royalties from the hotel company's use of the Shoney’s name, according to a lawsuit filed in the Court of Appeals of Tennessee.
In 2002, the hotel company decided to re-brand the Shoney's Inn locations, took a US$6.4 million write-off and began re-branding to the GuestHouse name, the court document says.
Then, in 2006, Boomerang purchased the hotel portfolio, which came with a handful of properties still branded as Shoney’s. Just a year later, new owners of the restaurant brand announced they intended to revive the restaurant brand, and subsequently Boomerang announced plans to relaunch the hotel brand. A suit was filed three days later.