One of the major challenging problems Korean hotel industry nowadays is faced with might be a huge economic gap between the deluxe hotels and the lower-class budget hotels. As the necessity of development on mid/low-priced hotels with better service quality grows higher, the interest on the mid/low-priced hotel chain is also increasing. This study aims at analyzing the determinants of franchising of these budget hotels and suggesting the franchising strategy, probably the most amenable policy alternative. Various determining factors for franchising were reviewed for theoretical references and study sample data were collected from 213 employees involved in deluxe hotels of Seoul. Through factor analysis and multiple regression analysis, authors identified four factors(i.e. brand, entrepreneur, managerial support, cost) were amenable to the franchise.