What Are Operating Procedures of Sleep Inn Franchise
Ever wondered how a Sleep Inn franchise operates and if it's the right investment for you? Understanding the franchise model, including initial investments and ongoing fees, is crucial for aspiring hotel owners. Dive into the specifics of this opportunity and explore how a well-crafted Sleep Inn Franchise Business Plan Template can pave your way to success in the hospitality sector.
| # | Operating Procedure | Description |
|---|---|---|
| 1 | Comprehensive Multi-Phase Training Program | This program is mandatory for the primary owner and general manager, beginning with online modules covering brand culture, operations, and sales. It includes a 5-day in-person immersion session at Choice Hotels headquarters or a certified training hotel, focusing on property management systems, revenue management strategies, and guest service protocols. |
| 2 | Ongoing Training Support | Post-opening, franchisees receive continuous professional development through regional workshops, annual brand conferences, and access to an online learning portal with over 200 courses. This ensures franchisees are equipped to adapt to market changes and maximize profitability, as evidenced by a 10% higher Net Promoter Score (NPS) compared to the midscale segment average due to a focus on operational efficiency and guest satisfaction. |
Operating Procedure to Explain the Sleep Inn Franchising Process
| # | Operating Procedure | Description |
|---|---|---|
| 1 | Structured Franchising Process | The process is a structured path including Initial Inquiry & Qualification, FDD Review & Due Diligence, Site Selection & Approval, Franchise Agreement Execution, Financing, Design & Construction, and Pre-Opening & Grand Opening. During due diligence, candidates are strongly advised to contact at least 10-15 current franchise owners for firsthand insights. |
| 2 | Franchisee Support and Guidance | Franchisees are assigned a dedicated franchise development director and a new hotel opening director for guidance from site selection through the first 90 days of operation. Choice Hotels also provides access to preferred lenders and third-party vendors at pre-negotiated rates, along with a pro-forma financial model template and business plan review. |
Key Takeaways
- The Sleep Inn business model focuses on operational efficiency and value for midscale travelers, utilizing a cost-effective prototype that reduces construction and operational footprints by up to 20%, typically supporting an 80-room property with lean staffing.
- Franchise income potential is substantial, with the top quartile of properties reporting an average Gross Room Revenue (GRR) of $2,150,400 in 2024, and projected 2025 Average Daily Rate (ADR) between $98-$108 with 63%-67% occupancy.
- Key benefits of owning a Sleep Inn franchise include access to Choice Hotels' global reservation system and the Choice Privileges loyalty program, which is projected to drive 50-55% of bookings, alongside a strong brand reputation and cost-effective design.
- The total investment to develop a new Sleep Inn prototype hotel is estimated between $7.32 million and $9.17 million, with an initial franchise fee of $48,750, and the majority of costs allocated to land, construction, and furnishings.
- Ongoing fees for a Sleep Inn franchise include a 5.5% royalty fee and a 3.50% marketing fee on gross room revenue, plus an annual fee of approximately $450 per available room for the Choice Privileges program.
- The franchise application process involves an online inquiry, FDD review, and financial qualification, requiring a minimum of $1 million in liquid capital and $1-$1.5 million net worth, with a 14-day waiting period after receiving the FDD before signing the agreement.
- Opening a Sleep Inn franchise is a multi-stage process taking 24-36 months, encompassing site selection, design and construction (12-18 months for the new prototype), and a 60-90 day pre-opening phase including hiring, training, and local marketing.
What Is The Business Model Structure?
The Sleep Inn franchise operates as a focused-service, midscale hotel concept. Its core strategy revolves around operational efficiency and catering to value-conscious travelers. This is achieved through a cost-effective prototype designed to maximize franchisee return on investment.
What is the Sleep Inn business model?
The business model for a Sleep Inn franchise is centered on providing essential amenities for travelers seeking value. The 'Designed to Dream' prototype, which became standard in 2025, is a key component of this model. It's reported to reduce construction and operational footprints by as much as 20% compared to older midscale hotel designs. This efficiency typically supports an 80-room property with a lean staffing structure, usually around 15-20 full-time equivalent employees. The emphasis is on high-demand features, while eliminating less utilized extras. This approach contributed to Sleep Inn achieving an average guest satisfaction score of 4.5 out of 5 across major travel platforms in 2024, allowing for competitive pricing within its market segment.
What is the Sleep Inn franchise income potential?
The income potential for a Sleep Inn franchise is notable, supported by the brand's performance and operational efficiencies. According to Item 19 of the 2024 Franchise Disclosure Document, the top quartile of properties reported an average Gross Room Revenue (GRR) of $2,150,400. For 2025, industry projections estimate the average daily rate (ADR) for Sleep Inn properties to fall between $98 and $108. Coupled with an anticipated system-wide occupancy rate of 63% to 67%, these figures directly impact revenue generation. Profitability is further bolstered by operating costs that are generally lower than the midscale hotel industry average. As of late 2024, these costs were estimated to be around 58-62% of total revenue, compared to the industry average of 65%.
Key Considerations for the Sleep Inn Business Model
- Operational Efficiency: The lean staffing and prototype design are crucial for maintaining profitability.
- Value Proposition: Targeting value-conscious travelers ensures a consistent demand base.
- Brand Strength: High guest satisfaction scores support premium pricing and occupancy rates.
Understanding the financial aspects is vital for anyone considering a Sleep Inn franchise opportunity. For instance, the initial investment can range from $7,322,750 to $9,173,695. The franchise fee alone is $48,750, with ongoing royalty fees at 5.5% and marketing fees at 3.50%. Prospective franchisees should also be aware of the required cash, which is between $125,000 and $270,000, and a net worth requirement of $1,000,000 to $1,500,000. While the median annual revenue per unit was reported at $1,171,000 in the latest data, it's important to review the full Franchise Disclosure Document for a comprehensive understanding of potential earnings. You can find more details on earnings potential at How Much Does a Sleep Inn Franchise Owner Make?.
Is Sleep Inn a Good Franchise to Own?
The Sleep Inn franchise opportunity presents a compelling case for many entrepreneurs looking to enter the hospitality sector. Understanding how the Sleep Inn franchise works involves looking at its core benefits, supported by owner feedback and the brand's strategic advantages.
What are the Sleep Inn franchise benefits?
Investing in a Sleep Inn franchise brings several distinct advantages. Franchisees gain access to Choice Hotels' extensive global reservation system, a significant asset for driving bookings. This system, coupled with the robust loyalty program, Choice Privileges, is a major contributor to success. As of June 2025, it's projected that this system will account for between 50% and 55% of all Sleep Inn bookings, effectively lowering individual marketing expenses.
Furthermore, the brand is known for its cost-effective building design, making the initial investment more manageable. Franchisees also receive comprehensive training and ongoing operational support. This commitment to franchisee success is reflected in a high renewal rate for franchise agreements, consistently over 95% between 2022 and 2024.
What do Sleep Inn franchise owner reviews indicate?
Franchise owner reviews consistently highlight the efficiency of the Sleep Inn prototype and the strength of the Choice Hotels support network as key drivers of success. In a 2024 industry survey focusing on franchisee satisfaction within the midscale segment, the Sleep Inn brand ranked in the top 15%. Notably, 85% of owners reported they would recommend the franchise to potential investors.
Owners frequently express appreciation for the brand's continuous innovation. For instance, the rollout of enhanced digital key technology in 2025 is anticipated to improve guest satisfaction by 5-7% and streamline the check-in process, demonstrating a forward-thinking approach to operations.
Tips for Evaluating a Sleep Inn Franchise Opportunity
- Analyze the Brand's Reservation System Contribution: Understand how much of your business will be driven by the franchisor's central reservation system and loyalty program. For Sleep Inn, this is a significant factor, potentially covering over half your bookings.
- Review Franchisee Satisfaction Scores: Look at independent surveys and owner reviews to gauge overall satisfaction and the likelihood of recommending the franchise. High satisfaction rates, like Sleep Inn's 85% recommendation from owners, are a strong positive indicator.
- Assess Ongoing Innovation: Consider how the franchisor invests in new technologies or operational improvements that can enhance guest experience and operational efficiency, such as digital key technology.
The initial investment for a Sleep Inn franchise can range from approximately $7,322,750 to $9,173,695. This includes an initial franchise fee of $48,750, with a required cash investment between $125,000 and $270,000. Franchisees are also required to have a net worth between $1,000,000 and $1,500,000. The ongoing fees include a royalty fee of 5.5% and a marketing fee of 3.50% of revenue. The average annual revenue per unit was reported at $57,180, with a median of $1,171,000. The breakeven time is estimated at 24 months, with an investment payback period of around 72 months. The number of franchised units has steadily grown, from 402 in 2020 to 414 in 2022, with no corporate-owned units during this period.
For a deeper dive into the financial commitments and operational details, understanding What are the Pros and Cons of Owning a Sleep Inn Franchise? is crucial for aspiring owners.
What Is The Sleep Inn Franchise Cost?
Understanding the financial commitment is a crucial first step for anyone considering a Sleep Inn franchise opportunity. The investment required to open a new Sleep Inn hotel can be substantial, reflecting the capital-intensive nature of the hospitality industry. As of June 2025, the estimated total investment for a new 86-room prototype hotel ranges from $75 million to $92 million.
This significant figure is largely driven by the costs associated with land acquisition, construction, and furnishing, which typically represent between 70-80% of the total expenditure. The initial franchise fee for a Sleep Inn franchise is $50,000. Beyond these primary components, the Sleep Inn Franchise Disclosure Document also details other essential investments, such as a property management system (PMS) with an estimated cost of $25,000 to $35,000, and a pre-opening marketing budget of approximately $15,000.
What are the fees for a Sleep Inn franchise?
Once your Sleep Inn franchise is operational, there are ongoing fees to consider. These include a monthly royalty fee, which, as of 2025, stands at 5% of gross room revenue. This is a standard rate within the midscale hotel segment. In addition to royalties, franchisees contribute to a system-wide marketing and reservation fee, set at 3% of gross room revenue. This fee supports national advertising efforts and the operation of the central booking platform.
Furthermore, there's an annual fee for participation in the Choice Privileges loyalty program, which is approximately $450 per available room. This program is vital for driving repeat business and ensuring guest loyalty, a key factor in the success of any franchise Sleep Inn location.
Key Financial Benchmarks for a Sleep Inn Franchise
- Initial Investment Range: $7,322,750 to $9,173,695 (based on FDD data)
- Initial Franchise Fee: $48,750
- Ongoing Royalty Fee: 5.5% of gross room revenue
- Marketing Fee: 3.50% of gross room revenue
- Cash Required: $125,000 - $270,000
- Net Worth Required: $1,000,000 - $1,500,000
- Average Annual Revenue per Unit: $57,180 (Note: Median revenue is significantly higher at $1,171,000, indicating a wide variance in performance)
For those looking to understand the full scope of opening a Sleep Inn franchise, exploring the How to Start a Sleep Inn Franchise in 7 Steps: Checklist can provide a structured roadmap. It's important to note that the provided FDD data indicates a median annual revenue per unit of $1,171,000, which is a strong indicator of the potential income for a well-performing Sleep Inn franchise.
Operating Procedure To Secure A Sleep Inn Franchise
Securing a franchise opportunity involves a structured process designed to ensure a good fit for both the franchisor and the franchisee. Understanding these steps is crucial for aspiring owners.
What is the Sleep Inn franchise application process?
The journey to owning a Sleep Inn franchise begins with an online inquiry submitted through the Choice Hotels development website. Following this initial step, a franchise development director will typically reach out within 2-3 business days to discuss the specifics of the Sleep Inn franchise opportunity.
Next, prospective franchisees are required to submit a formal application. This application needs to be accompanied by a comprehensive business plan and detailed financial statements. These documents are essential to demonstrate that you meet the Sleep Inn franchise requirements, which include a minimum liquidity of $1 million and a net worth of at least $2 million.
Once your application receives preliminary approval, you will be provided with the Franchise Disclosure Document (FDD). This document is legally mandated and must be reviewed for a minimum of 14 days before any finalization or signing of the Sleep Inn franchise agreement can occur.
How do you find Sleep Inn franchise territories available?
Identifying available territories is a collaborative effort with a Choice Hotels franchise development director. They utilize proprietary market analysis software to pinpoint areas that exhibit strong demand and significant growth potential. As of 2025, key expansion markets are concentrated in secondary and tertiary cities across the Sun Belt and Midwest regions. These locations are often chosen for their proximity to corporate parks, airports, and major interstate highways.
When you enter into a franchise agreement, you are granted a protected territory. This territory is typically defined by specific geographic boundaries or a radius, such as 3-5 miles. This protection ensures that no other Sleep Inn location can open within that designated zone for the entire 20-year term of the agreement.
Key Considerations for Territory Selection
- Market Research: Leverage the franchisor's market analysis tools to identify underserved or high-potential areas.
- Demographics: Analyze local population trends, income levels, and business growth to ensure a suitable customer base.
- Competition: Assess the existing hospitality landscape to understand market saturation and competitive advantages.
The initial investment for a Sleep Inn franchise can range from approximately $7,322,750 to $9,173,695. This includes an initial franchise fee of $48,750. Additionally, franchisees are expected to pay a royalty fee of 5.5% of gross revenue and a marketing fee of 3.50%. The required cash on hand is between $125,000 and $270,000, with a net worth requirement of $1,000,000 to $1,500,000. For a deeper dive into the financial aspects, explore How Much Does a Sleep Inn Franchise Cost?
| Financial Requirement | Minimum | Maximum |
| Initial Investment | $7,322,750 | $9,173,695 |
| Cash Required | $125,000 | $270,000 |
| Net Worth Required | $1,000,000 | $1,500,000 |
| Fee Type | Percentage/Amount |
| Initial Franchise Fee | $48,750 |
| Royalty Fee | 5.5% of Revenue |
| Marketing Fee | 3.50% of Revenue |
In terms of performance, the average annual revenue per unit was reported at $57,180 in the provided data, with a median of $1,171,000. The breakeven time is estimated at 24 months, and investment payback is projected at 72 months. The number of franchised units has seen steady growth, from 402 in 2020 to 414 in 2022.
Operating Procedure To Launch A Sleep Inn Franchise
How to open a Sleep Inn franchise?
Embarking on the journey to open a Sleep Inn franchise is a structured process designed to ensure brand consistency and operational success. It begins with a critical site selection and acquisition phase. This initial stage typically spans 6 to 12 months and requires rigorous brand approval to ensure the location meets specific demographic and accessibility criteria. Following the successful acquisition and approval of a suitable site, the next major step is the design and construction phase. For the brand's new 86-room prototype, this phase is projected to take approximately 12 to 18 months from the groundbreaking ceremony to the final completion, aiming for readiness by 2025.
The final push towards opening day involves a concentrated 60-90 day pre-opening period. During this time, the focus shifts to building the operational foundation. This includes the critical task of hiring and training staff, implementing the comprehensive Sleep Inn franchise training program, and executing a targeted local marketing blitz. This pre-opening marketing effort is crucial for building community awareness and generating buzz ahead of the grand opening, ensuring a strong start for the new franchise unit.
What are the Sleep Inn franchise requirements?
To qualify for a Sleep Inn franchise opportunity, prospective franchisees must meet significant financial and operational benchmarks. Financially, the requirements are substantial, with a minimum of $1 million in liquid capital needed. Furthermore, a total net worth of at least $2 million is required for each property a franchisee intends to develop. These figures underscore the brand's commitment to partnering with well-capitalized individuals or entities.
Operationally, a key requirement is the successful completion of the mandatory owner/management training program. This program is comprehensive, consisting of approximately 120 hours of combined online and in-person instruction, ensuring franchisees are well-versed in brand standards and operational procedures. Beyond training, demonstrating prior business or hotel management experience is vital. In fact, data from 2024 indicates that over 70% of new franchisees possessed previous hospitality industry experience, highlighting the importance of this background for a successful Sleep Inn franchise.
Key Considerations for Aspiring Franchisees
- Financial Preparedness: Ensure you meet the minimum liquid capital of $1 million and net worth of $2 million per property.
- Operational Experience: Prioritize gaining experience in business or hotel management, as this is a key factor in the approval process.
- Training Commitment: Be prepared to dedicate time to the approximately 120-hour franchise training program.
- Site Selection: Understand that site selection and acquisition can be a lengthy process, often taking 6 to 12 months.
| Initial Investment Range | $7,322,750 - $9,173,695 |
| Franchise Fee (Initial) | $48,750 |
| Royalty Fee | 5.5% of revenue |
| Marketing Fee | 3.50% of revenue |
| Cash Required | $125,000 - $270,000 |
| Net Worth Required | $1,000,000 - $1,500,000 |
| Median Annual Revenue per Unit (2022) | $1,171,000 |
| Breakeven Time | Approximately 24 Months |
| Investment Payback | Approximately 72 Months |
| Total Franchised Units (2022) | 414 |
Understanding the financial commitments is crucial when considering the Sleep Inn franchise opportunity. The initial investment for a Sleep Inn franchise can range from $7,322,750 to $9,173,695. This broad range accounts for various factors like location, size, and specific build-out requirements. The initial franchise fee itself is $48,750, with ongoing fees including a royalty fee of 5.5% and a marketing fee of 3.50% of revenue. Prospective owners will need readily available cash, typically between $125,000 and $270,000, and a minimum net worth requirement of $1,000,000 to $1,500,000.
The potential for revenue is a key aspect of the Sleep Inn business model. While the average annual revenue per unit reported is $57,180, the median annual revenue per unit is significantly higher at $1,171,000, indicating a wide spectrum of performance. It's important to note that the lowest reported annual revenue per unit was $13,930, while the highest reached $149,000. For those evaluating the Sleep Inn franchise investment, understanding these revenue figures and the typical breakeven time of 24 months is essential. The investment payback period is estimated at around 72 months. For a deeper dive into earning potential, explore How Much Does a Sleep Inn Franchise Owner Make?
Operating Procedure To Understand The Sleep Inn Agreement
What are the Sleep Inn franchise agreement details?
When considering a Sleep Inn franchise opportunity, understanding the franchise agreement is paramount. The standard Sleep Inn franchise agreement typically spans a term of 20 years, with an option to renew for an additional 10 years. This renewal, however, is contingent upon the franchisee consistently meeting specific performance benchmarks and adhering to required renovation schedules.
The agreement meticulously outlines the brand standards that franchisees must uphold. This includes active participation in the 'Committed to Clean' initiative and strict adherence to the 'Designed to Dream' interior design package. Compliance is monitored through annual audits, ensuring brand consistency across all Sleep Inn locations. For example, in 2022, there were 414 franchised units, all of which are expected to meet these evolving standards.
Termination clauses are clearly defined within the agreement. Should a franchisee decide to terminate the agreement early, there are significant financial implications. Liquidated damages are typically calculated as a multiple, often 2x to 3x, of the average annual royalty and marketing fees paid over the preceding years. This highlights the importance of careful planning and commitment to the franchise model.
What does the Sleep Inn Franchise Disclosure Document (FDD) cover?
The Franchise Disclosure Document (FDD) is an essential document for anyone exploring the Sleep Inn franchise. It provides 23 legally mandated disclosure items, offering a comprehensive overview of the franchise system. This includes detailed information on all associated fees, a breakdown of the estimated initial investment, the specific obligations of a franchisee, and any relevant litigation history involving the franchisor or its affiliates.
Item 19 of the FDD is particularly crucial for financial analysis. This section presents financial performance representations, which can include metrics like the average Gross Room Revenue, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR) for both corporate-owned and franchised locations. For instance, while the median annual revenue per unit was $1,171,000, understanding the range provided in Item 19 is key to assessing income potential.
Furthermore, the FDD includes a complete list of current and former franchisees from the past year. This provides an invaluable resource for conducting thorough due diligence. Prospective franchisees can use this list to directly contact existing owners, gather firsthand insights into the Sleep Inn business model, and understand the realities of operating a Sleep Inn franchise. This direct communication can offer a more nuanced perspective than the data alone.
Key Considerations for the Sleep Inn Franchise Agreement
- Agreement Term: A 20-year term with a 10-year renewal option requires long-term commitment and adherence to brand standards.
- Brand Standards: Strict compliance with initiatives like 'Committed to Clean' and the 'Designed to Dream' package is mandatory and subject to annual audits.
- Early Termination Fees: Understand that early termination can incur substantial liquidated damages, typically 2x to 3x average annual royalty and marketing fees.
- FDD Item 19: Carefully review financial performance representations to gauge potential revenue and profitability.
- Franchisee Due Diligence: Leverage the FDD's list of current and former franchisees for direct feedback.
| Initial Franchise Fee | $48,750 |
| Royalty Fee | 5.5% of revenue |
| Marketing Fee | 3.50% of revenue |
| Low Initial Investment | $7,322,750 |
| High Initial Investment | $9,173,695 |
| Cash Required | $125,000 - $270,000 |
| Net Worth Required | $1,000,000 - $1,500,000 |
When evaluating the Sleep Inn franchise opportunity, it's important to consider alternatives as well. What Are Some Alternatives to the Sleep Inn Franchise? can provide further context for your decision-making process.
Operating Procedure to Train for a Sleep Inn Franchise
What is the Sleep Inn franchise training program?
The Sleep Inn franchise training program is designed to equip new owners and general managers with the essential knowledge and skills to operate a successful hotel. This comprehensive program is structured in multiple phases. It begins with online modules that cover fundamental aspects of the brand's culture, day-to-day operations, and sales techniques. Following the online coursework, participants attend a mandatory 5-day in-person immersion session. This session is typically held at the Choice Hotels headquarters or a designated certified training hotel. Here, the focus shifts to practical application, including hands-on training with property management systems, effective revenue management strategies, and guest service protocols that are critical for maintaining brand standards.
Beyond the initial training, the support continues long after the doors open. Franchisees receive ongoing training through regional workshops and annual brand conferences. Additionally, an extensive online learning portal provides access to over 200 courses, ensuring that professional development is a continuous process. This multi-faceted approach ensures that franchisees are well-prepared and continually updated on best practices.
How does training support franchisee success?
The impact of this structured training on franchisee success is significant and measurable. For instance, data from 2024 indicates that hotels managed by individuals who completed advanced revenue management training experienced a 4-6% higher RevPAR (Revenue Per Available Room) compared to those who did not. This highlights the direct correlation between specialized training and improved financial performance.
Furthermore, the program's emphasis on operational efficiency and robust guest satisfaction protocols plays a crucial role in the brand's performance. These elements have contributed to the brand maintaining a Net Promoter Score (NPS) that is approximately 10% higher than the average for hotels in the midscale segment. This superior guest experience often translates into repeat business and positive word-of-mouth referrals.
Continuous learning is also a cornerstone of the franchise model. The introduction of new technologies, such as the AI-powered revenue management tools launched in late 2024, equips franchisees with the tools they need to adapt to evolving market dynamics. This proactive approach to training ensures that owners are well-positioned to maximize profitability and maintain a competitive edge in the hospitality industry.
Tips for Maximizing Franchise Training
- Actively participate in all training sessions, asking questions to clarify any uncertainties.
- Network with fellow franchisees during the in-person training to share insights and build relationships.
- Utilize the online learning portal for ongoing skill development and to stay updated on new initiatives.
Understanding the financial commitment is a key step in evaluating the Sleep Inn franchise opportunity. The initial investment for a franchise can range from $7,322,750 to $9,173,695. This investment covers various aspects, and it's important to note that the required cash on hand is between $125,000 and $270,000, with a net worth requirement between $1,000,000 and $1,500,000. To get a detailed breakdown of these figures, you can refer to How Much Does a Sleep Inn Franchise Cost?
The ongoing financial commitments include an initial franchise fee of $48,750, a royalty fee of 5.5% of gross revenue, and a marketing fee of 3.50%. The breakeven time is estimated at 24 months, with an investment payback period of around 72 months. In 2022, the brand had 414 franchised units, indicating a stable and growing presence in the market.
| Key Financials | Data |
|---|---|
| Initial Investment Range | $7,322,750 - $9,173,695 |
| Initial Franchise Fee | $48,750 |
| Royalty Fee | 5.5% |
| Marketing Fee | 3.50% |
| Performance Metrics | Value |
|---|---|
| Average Annual Revenue per Unit (2022) | Approximately $1,171,000 (Median) |
| Breakeven Time | 24 Months |
| Investment Payback | 72 Months |
Operating Procedure To Explain The Sleep Inn Franchising Process
Embarking on the journey to open a Sleep Inn franchise involves a structured, multi-stage process designed to ensure both franchisee and franchisor alignment and success. This pathway is meticulously laid out to guide aspiring owners from their initial interest through to a successful grand opening.
What is the Sleep Inn franchising process explained step-by-step?
The Sleep Inn franchising process explained is a clear, sequential journey. It begins with an Initial Inquiry & Qualification, where potential franchisees express interest and meet preliminary requirements. Following this is the FDD Review & Due Diligence phase, a critical period for in-depth research. Next, Site Selection & Approval ensures the chosen location aligns with brand standards and market potential. Upon successful site approval, the Franchise Agreement Execution formalizes the partnership. The process then moves into Financing, Design & Construction, where the physical hotel is developed. Finally, Pre-Opening & Grand Opening activities prepare the business for its launch.
During the crucial FDD Review & Due Diligence phase, which is step two, it's highly recommended that candidates connect with at least 10-15 current franchise owners listed in the Franchise Disclosure Document (FDD). This direct outreach provides invaluable firsthand insights into operational performance and the level of franchisor support experienced by existing franchisees.
For a new construction Sleep Inn franchise project, the entire timeline, from the initial inquiry to the grand opening, is estimated to span between 24 and 36 months, as of 2025. This timeframe accounts for all necessary development and approval stages.
What support is provided during this process?
Throughout this comprehensive process, franchisees receive dedicated support from the franchisor. Each franchisee is assigned a personal Franchise Development Director and a New Hotel Opening Director. These individuals offer guidance from the critical site selection phase all the way through the initial 90 days of operation, ensuring a smooth transition and strong start.
Furthermore, the franchisor provides access to a curated list of preferred lenders and vetted third-party vendors. These partners specialize in areas such as architecture, construction, and supplies. By utilizing these pre-negotiated services, franchisees can potentially achieve cost savings ranging from 5-10% on their overall development expenses.
To aid in financial planning and operational strategy, the franchisor also supplies a pro-forma financial model template. They actively review the franchisee's business plan, offering constructive feedback informed by performance data collected from over 400 operating Sleep Inn locations. This data-driven approach helps align franchisee expectations with real-world performance metrics.
The initial investment for a Sleep Inn franchise can range from $7,322,750 to $9,173,695. Key fees include an initial franchise fee of $48,750, a royalty fee of 5.5%, and a marketing fee of 3.50%. Prospective franchisees typically need between $125,000 and $270,000 in cash and a net worth of $1,000,000 to $1,500,000.
In terms of financial performance, the average annual revenue per unit was reported at $57,180 in the FDD. However, the median annual revenue per unit is significantly higher at $1,171,000, with the lowest recorded at $13,930 and the highest at $149,000. On average, breakeven is achieved within 24 months, and investment payback is estimated at 72 months.
For those considering this franchise opportunity, understanding the operational structure is key. The franchisor has consistently grown its network, with 402 franchised units in 2020, increasing to 414 franchised units by 2022. Notably, there are no corporate-owned units, indicating a strong focus on the franchise model.
Key Considerations for Franchisees
- Thoroughly review the Franchise Disclosure Document (FDD). This document contains critical information about the franchisor, the business model, fees, and the rights and obligations of both parties.
- Conduct extensive due diligence on existing franchisees. Speaking with at least 10-15 current owners provides a realistic view of the day-to-day operations, profitability, and support received.
- Develop a detailed financial plan. Ensure you have sufficient capital to cover the initial investment, ongoing fees, and operating expenses, including the required cash and net worth.
- Understand the projected timeline. The 24-36 month development period for new construction requires patience and careful project management.
| Financial Metric | Amount ($) | Percentage of Revenue (%) |
|---|---|---|
| Average Annual Revenue | 58,821 | 100% |
| EBITDA | 7,977 | 13.5% |
| Expense Type | Annual Amount ($) |
|---|---|
| Selling, General and Administrative | 207,275 |
| Other Expenses from Franchised and Managed Properties | 653,060 |
For a deeper dive into the specifics and to weigh your options, consider exploring What are the Pros and Cons of Owning a Sleep Inn Franchise?