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Comfort Inn Franchise ProfileLodging & Leisure > Lodging |
What Are the Initial Investment Requirements for a Comfort Inn Franchise?
To become a Comfort Inn franchisee, you should be prepared for a significant initial investment, ranging from $307,150 to $11,956,491. This includes a franchise fee of $50,000. Additionally, you'll need to have cash readily available between $50,000 and $65,000, and a net worth of $500,000 to $1,000,000. Understanding these financial commitments is crucial as you evaluate your readiness for ownership.
What Are the Ongoing Fees Associated with Owning a Comfort Inn Franchise?
As a Comfort Inn franchisee, you will be responsible for ongoing royalty and marketing fees. The royalty fee is set at 6.00% of your revenue, while the marketing fee is 3.5%. These fees are essential for maintaining brand standards and supporting national marketing efforts. Being aware of these costs will help you better manage your financial planning and operational budget.
What Is the Average Revenue and Profitability of a Comfort Inn Franchise?
The average annual revenue for a Comfort Inn unit is approximately $1,298,521, with a gross profit margin of 42.5%. This indicates a healthy potential for profitability within the franchise model. However, it's important to note that revenue can vary significantly, with the lowest annual revenue recorded at $15,730 and the highest at $222,900. Understanding these figures can aid you in projecting your financial performance and setting realistic goals.
How Long Does It Typically Take to Break Even with a Comfort Inn Franchise?
Franchisees can expect to reach their breakeven point within approximately 24 months of operation. This timeframe is essential for planning your financial strategy, as it indicates how long it may take before your investment starts generating a return. Being aware of this timeline can help you prepare for initial operating expenses and ensure you have adequate working capital during the startup phase.
Comfort Inn 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:
Comfort Inn 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 | 1609 | 1632 | 1645 |
| Net Change YoY | 23 | 13 | |
| Franchised Units | 1609 | 1632 | 1645 |
| Net Change YoY | 23 | 13 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Comfort Inn franchise offers a range of initial investment costs, starting as low as $307,150 and going up to $11,956,491. This variance allows potential franchisees to assess their financial readiness and select a property type that aligns with their budget and market strategy.
Franchise Fees
To begin your journey with Comfort Inn, an initial franchise fee of $50,000 is required. In addition to this, franchisees are responsible for a royalty fee of 6% of gross sales and a marketing fee of 3.5%, which contribute to the ongoing support and brand presence.
Financial Performance
Comfort Inn units report an average annual revenue of approximately $781,000, with a median revenue of $64,970. This performance can vary widely, with the lowest reported annual revenue at $15,730 and the highest at $222,900, indicating potential for significant profitability based on location and management.
Required Financial Standing
Prospective franchisees must demonstrate a net worth of $500,000 to $1,000,000, along with cash reserves of $50,000 to $65,000. This financial requirement ensures that franchisees are well-prepared to manage their investment and operational costs effectively.
Breakeven and Payback
The Comfort Inn franchise typically sees a breakeven period of around 24 months, with an investment payback also estimated at 24 months. This timeline allows franchisees to plan their financial recovery and growth strategy effectively.
Franchise Growth
The Comfort Inn brand has shown consistent growth, with the number of franchised units increasing from 1,609 in 2020 to 1,645 in 2022. This upward trend reflects the brand's stability and the ongoing demand for affordable lodging options across various markets.
Frequently Asked Questions
The initial investment for a Comfort Inn franchise ranges from approximately $307,150 to $11,956,491, which includes the franchise fee, equipment, and other startup costs.