Choice Hotels will directly operate the franchise in the UK from headquarters in London- all 78 properties.

Choice Hotels International, Inc. has executed a definitive agreement that will transfer franchising operations from Real Hotel Group plc to Choice for its Comfort, Quality, Sleep and Clarion brand hotels in the United Kingdom on January 31.

At that time, the master franchise agreement between Choice and Real Hotel Group for the UK will be terminated and the existing franchise agreements will be assigned to a Choice subsidiary.

As a result of the agreement, Choice will directly operate the franchise in the UK now consisting of 78 properties from the headquarters in London. This transaction follows Choice's acquisition in fourth-quarter 2006 of the franchising operations for the European countries of Austria, Belgium, France, Spain, Germany, Italy, the Czech Republic and Switzerland.

"The acquisition of the United Kingdom franchising operation is another element of our strategy to maximize our growth opportunities across Europe," said Mark Pearce, vp/international operations, Choice Hotels International. "...In the past year, we have focused our efforts on developing and implementing a number of pan-European marketing programs. The United Kingdom market will play a key role in our efforts to enhance brand awareness across the continent..."

According to Choice, this acquisition is not expected to have a material impact on the company's results of operations, cash flows or financial condition.

For 2008, incremental revenues expected as a result of transitioning from a master franchising to direct franchising business model will be substantially offset by direct franchising costs associated with the acquired businesses. In addition, these acquisitions do not result in incremental international franchise system units or rooms on-line, according to Choice.