|
Days Inn & Suites Franchise ProfileLodging & Leisure > Lodging |
What Are the Initial Investment Requirements for a Days Inn & Suites Franchise?
To open a Days Inn & Suites franchise, you will face a range of initial investment costs. The total investment can start as low as $190,177 and go up to $6,395,289, depending on various factors such as location and size. The initial franchise fee is set at $35,000. Additionally, franchisees should be prepared for ongoing costs, including a royalty fee of 5.5% of gross revenue and a marketing fee of 3.8%. It's crucial to ensure you have the required cash on hand, which ranges from $190,177 to $3,392,263, and a net worth between $500,000 and $1,000,000.
What Is the Average Revenue Potential for Days Inn & Suites Franchisees?
Days Inn & Suites franchisees can expect significant revenue potential. The average annual revenue per unit is approximately $1,184,000, with the highest reported at $1,099,000. However, it's important to note the median annual revenue is lower, at around $42,720, indicating variability in performance based on location and management. Understanding these figures can help you gauge the profitability and set realistic financial goals for your franchise.
What Are the Expected Financial Metrics for Days Inn & Suites Franchisees?
Franchisees should be aware of the financial metrics that can impact their bottom line. The average annual revenue is $1,565,000, with a gross profit margin of 79.6%. Operating expenses typically amount to $799,000, resulting in an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $446,000, which represents about 28.5% of revenue. These figures highlight the importance of managing costs effectively to maximize profitability.
How Long Does It Take to Break Even with a Days Inn & Suites Franchise?
The breakeven period for a Days Inn & Suites franchise is estimated at 24 months, which is relatively standard in the hospitality industry. Additionally, franchisees can expect to pay back their initial investment within approximately 30 months. This timeline is crucial for potential investors to consider, as it helps in planning cash flow and understanding the time frame for achieving profitability in this franchise model.
Days Inn & 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:
Days Inn & Suites Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total Units | 1432 | 1370 | 1326 |
| Net Change YoY | -62 | -44 | |
| Franchised Units | 1432 | 1370 | 1326 |
| Net Change YoY | -62 | -44 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY |
Franchise Overview
Days Inn & Suites is a well-recognized hotel franchise within the Wyndham Hotels & Resorts portfolio, offering affordable accommodations across North America. With a focus on providing comfortable lodging for travelers, Days Inn & Suites caters to both business and leisure guests, featuring amenities such as free breakfast, Wi-Fi, and meeting facilities. The brand’s commitment to quality service and value has positioned it as a reliable choice for budget-conscious travelers.
Initial Investment
Aspiring franchisees looking to invest in a Days Inn & Suites can expect a low initial investment starting at $190,177, with the potential to reach up to $6,395,289 depending on location and size. The initial franchise fee is set at $35,000, which grants access to the established brand and operational support. This investment structure allows for flexibility, accommodating various financial capabilities among potential franchisees.
Ongoing Fees
Days Inn & Suites charges a royalty fee of 5.5% of gross sales, along with a marketing fee of 3.8%. These fees contribute to the brand’s national marketing efforts and ongoing support, ensuring that franchisees benefit from a strong brand presence and promotional activities. Understanding these fees is essential for franchisees to accurately forecast their financial performance and profitability.
Financial Performance
On average, a Days Inn & Suites unit generates annual revenue of approximately $1,184,000, with a median revenue of $42,720. The range of annual revenue spans from $42,720 to $1,099,000, indicating varying performance levels based on location and management. This financial insight is crucial for prospective franchisees to evaluate potential return on investment and operational efficiency.
Breakeven and Payback
Franchisees can expect a breakeven period of around 24 months, with an investment payback timeframe of approximately 30 months. These metrics are vital for planning and financial forecasting, providing franchisees with a clearer picture of when they can expect to recoup their initial investment and start generating profits.
Franchise Growth
Days Inn & Suites has seen a consistent presence in the market, with a total of 1,432 franchised units in 2019, gradually decreasing to 1,326 by 2021. This trend reflects the competitive landscape of the hospitality industry and the importance of strategic location selection and operational excellence for franchise success. Understanding these dynamics can help potential franchisees make informed decisions about entering the market.
Frequently Asked Questions
The initial investment for a Days Inn & Suites franchise ranges from $190,177 to $6,395,289. This includes the franchise fee, equipment, and other startup costs.