Types of ownership in the hospitality industry

Hospitality Industry Ownership Structures

Sole Trader

A sole trader is an individual who owns and runs their own business.
They are responsible for all business debts and decisions.
Often seen in smaller hospitality businesses such as bed and breakfasts, cafés, and local restaurants.

Partnership

Partnerships are businesses owned and run by two or more people.
Each partner contributes to all aspects of the business, from capital to skills.
They also share the business’s profits and losses proportionally to their investment.
More common in medium-sized businesses like restaurant chains or boutique hotels.

Private Limited Company

Private limited companies (Ltd) are privately held entities in which owner liability is limited to their shares.
The company shares cannot be freely traded and often belong to family or friends.
Common in large hospitality businesses like luxury hotels or branded restaurant groups.

Public Limited Company

Public Limited Companies (Plc) are among the largest types of company structure in the hospitality industry.
These companies have their stock listed on a stock exchange, providing them with access to a large amount of capital.
This type of ownership often involves large national or multinational hotel chains.

Franchise

A franchise is a legal and commercial relationship between the owner of a trademark or trade name (the franchisor) and an individual or company licensed to operate a business (the franchisee) under this trademark or trade name.
The franchisee agrees to follow a set business model and guidelines, often paying a fee to the franchisor.
This type of ownership is commonly seen in fast-food outlets, hotel chains and coffee shops.

Cooperative

A cooperative is a business that is owned and run by the people who work in it or use its services.
Profit is shared among the members.
This style of ownership is less common but can be seen in community-owned pubs or local producers.

Remember, each type of ownership has its strengths and weaknesses and is suitable for different types of operations in the hospitality industry. Always review the needs and goals of the business to choose the appropriate structure.