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a large hotel frequently had its hotel operated under a franchise
with a national hotel company like Hilton Hotels or Marriott
Hotels.64 For instance, under a franchise agreement with Hilton
Hotels, the hotel owner could obtain the right to use the Hilton
name as well as the services of the Hilton national hotel
reservation system. The hotel owner then could have its Hilton-
franchised hotel managed and operated under a short-term
management contract with either Hilton Hotels (the franchisor) or
another hotel management company.65
d. The Gateway Hilton and John Connolly
Beginning in 1976, one of Ostroff’s first assignments at
Prudential was to improve the operating condition of the Gateway,
a hotel at Newark, New Jersey. The Gateway was located a few
blocks from Prudential’s corporate headquarters. The hotel was
shabby, as Prudential had recently acquired it through
foreclosure. Moreover, the class or type of customers that prior
operators of the hotel catered to was not the type of clientele
Prudential was comfortable with because other Prudential
64 During the period relevant to these cases, Hyatt Corp.
did not offer such franchise arrangements.
65 A hotel management executive testified that a national
hotel company, like Hilton Hotels, could not grant a hotel
franchise to a hotel owner conditioned upon the owner’s also
entering into a management contract with it for the franchised
hotel, as such action might violate the antitrust laws.
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