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Candlewood Suites Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Initial Investment Requirements for a Candlewood Suites Franchise?
To open a Candlewood Suites franchise, you need to prepare for an initial investment ranging from $12,217,200 to $18,328,830. This includes a franchise fee of $50,000, along with cash requirements that align with your financial capabilities. It’s essential to have a net worth between $1,500,000 and $2,000,000 to qualify for this opportunity. Understanding these financial obligations will help you assess your readiness to enter the hospitality industry.
What Are the Ongoing Fees Associated with Candlewood Suites?
Owning a Candlewood Suites franchise involves ongoing fees that contribute to the brand's marketing and operational support. The royalty fee is set at 5.5% of your unit's revenue, along with a marketing fee of 2.50%. These fees are critical for maintaining brand standards and supporting marketing initiatives that drive customer traffic to your location. Being aware of these costs will help you effectively plan your budget and financial forecasts.
What Is the Average Revenue Potential for Candlewood Suites Franchisees?
Candlewood Suites franchisees can expect an average annual revenue of approximately $76,554 per unit, with a median revenue of $1,148,000. Revenue can vary significantly, with the lowest recorded at $27,054 and the highest at $156,050. Understanding the revenue potential helps you set realistic financial goals and strategies for growth as you navigate the competitive landscape of the hospitality industry.
How Long Does It Take to Break Even with a Candlewood Suites Franchise?
The breakeven time for a Candlewood Suites franchise is typically around 24 months. This duration indicates how long it may take for your initial investment to be recouped through your unit's profits. With an investment payback period of the same length, planning your cash flow and financial management strategies becomes crucial to ensure your franchise's success in achieving profitability.
Candlewood Suites 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:
Candlewood Suites 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 | 361 | 356 | 363 |
| Net Change YoY | -5 | 7 | |
| Franchised Units | 361 | 356 | 363 |
| Net Change YoY | -5 | 7 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The initial investment for a Candlewood Suites franchise ranges from $12,217,200 to $18,328,830. This includes various costs such as real estate, construction, and equipment necessary to establish a new unit. An initial franchise fee of $50,000 is also required, which grants franchisees the right to operate under the Candlewood Suites brand.
Royalty and Marketing Fees
Candlewood Suites charges a royalty fee of 5.5% on gross sales, which supports ongoing brand development and operational support. Additionally, a marketing fee of 2.5% is required, contributing to national advertising campaigns and promotional efforts that enhance brand visibility and attract guests.
Financial Performance
On average, Candlewood Suites units generate annual revenues of approximately $1,148,000, with the highest reported revenue reaching $156,050. This indicates a strong potential for profitability, with a breakeven time of around 24 months, allowing franchisees to recoup their initial investment relatively quickly.
Franchise Growth
As of 2022, Candlewood Suites has maintained a stable number of franchised units, with 363 locations operating. The franchise has shown resilience, with only slight fluctuations in the number of units over recent years, indicating a steady demand for this hotel brand in the marketplace.
Required Financials
Prospective franchisees must have a minimum net worth of $1,500,000 to $2,000,000 and cash liquidity matching the initial investment range. These financial requirements ensure that franchisees are well-prepared to manage their business effectively and sustain operations during the initial growth phase.
Operational Expenses
Candlewood Suites franchisees can expect various operating expenses, with total operating costs averaging around $2,424,112 annually. Key expenses include property taxes, maintenance, general administrative costs, and marketing, which are crucial for maintaining the quality and service standards associated with the brand.
Frequently Asked Questions
The total initial investment for a Candlewood Suites franchise ranges from approximately $12,217,200 to $18,328,830. This includes the initial franchise fee and other startup costs.