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Aloft Hotels Franchise ProfileLodging & Leisure > Lodging |
What Are the Initial Investment Requirements for an Aloft Hotels Franchise?
To open an Aloft Hotels franchise, you should expect a significant initial investment, ranging from $3,000,000 to $28,988,510. The initial franchise fee is set at $75,000, with ongoing royalty fees of 5.5% on gross sales and a marketing fee of 1%. To ensure you can handle the financial commitment, you’ll need a minimum cash requirement of $3,000,000 and a net worth ranging from $150,000 to $500,000.
What Is the Financial Performance of Aloft Hotels Franchise Units?
Aloft Hotels franchises have shown promising financial performance, with an average annual revenue of $1,024,000 per unit. The lowest annual revenue recorded is $37,200, while the highest reaches up to $3,900,000. With a breakeven time of approximately 24 months and an investment payback period of about 27 months, potential franchisees can anticipate a reasonable return on their investment.
How Many Aloft Hotels Franchise Units Are Currently Operating?
Aloft Hotels has experienced steady growth in its franchised units over recent years. In 2020, there were 118 franchised units, which increased to 133 in 2021, and further to 146 in 2022. Alongside these, there are currently 2 corporate-owned units, indicating a healthy expansion strategy for the brand in the hospitality sector.
What Are the Average Operating Expenses for an Aloft Hotels Franchise?
The average operating expenses for an Aloft Hotels franchise are approximately $307,200 annually, accounting for 30% of total revenue. Key expenses include related party royalty expenses of $26,955 and general administrative costs of $1,341. Understanding these expenses is crucial for potential franchisees to effectively manage their financial performance and ensure profitability.
Aloft Hotels Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Aloft Hotels Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 119 | 134 | 148 |
| Net Change YoY | 15 | 14 | |
| Franchised Units | 118 | 133 | 146 |
| Net Change YoY | 15 | 13 | |
| Corporate Units | 1 | 1 | 2 |
| Net Change YoY | 0 | 1 |
Company Background
Aloft Hotels is a modern hotel chain that caters to tech-savvy travelers seeking a vibrant and contemporary atmosphere. Launched in 2005, Aloft is part of the Marriott International family, featuring stylish design, open spaces, and a focus on social interaction. With locations in major urban areas and near airports, Aloft Hotels offer a unique blend of comfort and convenience, appealing to both business and leisure guests.
Franchise Opportunity
Investing in an Aloft Hotels franchise provides a chance to be part of a growing brand within the hospitality sector. The initial investment ranges from $3 million to nearly $29 million, depending on the location and size of the property. With a franchise fee of $75,000 and ongoing royalties of 5.5%, franchisees can leverage Aloft's established brand recognition and operational support to build a successful hotel business.
Corporate Structure
Aloft Hotels operates under the umbrella of Marriott International, which is one of the largest and most respected hospitality companies in the world. The corporate structure supports franchisees through comprehensive training, marketing resources, and operational guidelines, ensuring consistency and quality across all locations. This backing allows franchisees to benefit from Marriott’s global reach and industry expertise.
Royalties and Fees
Franchisees are required to pay an initial franchise fee of $75,000, along with a royalty fee of 5.5% of gross sales. In addition, a marketing fee of 1% is assessed to support brand-wide promotional efforts. These fees are essential for maintaining brand standards and ensuring that franchisees benefit from ongoing marketing and operational support.
Financial Performance
Aloft Hotels franchisees can expect varied annual revenues, with an average of approximately $199,290 per unit. The breakeven period is estimated at 24 months, while investment payback typically occurs within 27 months. With a median annual revenue of $90,450, potential franchisees should consider these financial metrics when evaluating the profitability of an Aloft Hotels franchise.
Market Growth
The Aloft Hotels brand has shown consistent growth, expanding from 118 franchised units in 2020 to 146 in 2022. This upward trend reflects the increasing demand for modern and affordable hotel options in urban markets. With a focus on innovative design and guest experiences, Aloft is well-positioned to capture a larger share of the hospitality market as travel continues to rebound post-pandemic.
Frequently Asked Questions
The initial investment for an Aloft Hotels franchise ranges from approximately $3,000,000 to $28,988,510. This includes the franchise fee, build-out costs, and other startup expenses.