|
Embassy Suites Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What is the Initial Investment for an Embassy Suites Franchise?
To open an Embassy Suites franchise, you should anticipate a significant initial investment ranging from $17,954,895 to $85,698,315. This includes a franchise fee of $75,000. Additionally, you'll need to have cash available between $300,000 and $1,500,000, and a net worth of at least $5,715,500. Understanding these financial requirements is crucial for aspiring franchisees to ensure they are adequately prepared for the costs associated with launching a hotel franchise.
What Are the Ongoing Fees for an Embassy Suites Franchise?
Embassy Suites franchisees are required to pay ongoing fees that include a royalty fee of 3.50% on gross sales and a marketing fee of 4%. These fees contribute to the overall brand strength and marketing efforts that help drive business to your location. It's essential to factor these costs into your financial projections to maintain profitability and ensure a successful operation.
What is the Average Revenue Potential for Embassy Suites Franchisees?
The average annual revenue per unit for Embassy Suites is approximately $4,195,000, with a median revenue of $4,491,000. Franchisees can expect varied performance, with revenues ranging from a low of $1,000,000 to a high of $6,500,000. This revenue potential highlights the opportunity for substantial earnings, but it also underscores the importance of location and effective management in achieving financial success.
What is the Expected Breakeven Time for an Embassy Suites Franchise?
New Embassy Suites franchisees can generally expect to reach their breakeven point within 24 months of operation. The investment payback period is estimated at around 36 months. These timelines provide a framework for financial planning and help franchisees understand the time commitment required to achieve profitability in the competitive hospitality market.
Embassy 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:
Embassy Suites Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2017 | 2018 | 2019 |
|---|---|---|---|
| Total Units | 217 | 215 | 226 |
| Net Change YoY | -2 | 11 | |
| Franchised Units | 208 | 215 | 226 |
| Net Change YoY | 7 | 11 | |
| Corporate Units | 9 | 0 | 0 |
| Net Change YoY | -9 | 0 |
Initial Investment
The initial investment for an Embassy Suites franchise ranges from $17,954,895 to $85,698,315. This investment encompasses various costs, including real estate, construction, equipment, and initial inventory, making it essential for potential franchisees to conduct thorough financial planning and analysis.
Franchise Fees
The initial franchise fee for Embassy Suites is set at $75,000. This fee grants franchisees access to the brand's established business model, training programs, and ongoing support, which are crucial for successfully launching and operating a hotel under the Embassy Suites name.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee of 3.50% of gross sales, along with a marketing fee of 4%. These fees contribute to the overall brand marketing and operational support, helping to maintain the Embassy Suites reputation and visibility in the competitive hospitality sector.
Financial Performance
Embassy Suites units average annual revenue is approximately $4,195,000, with a median of $4,491,000. This financial performance indicates the brand's strong market presence and appeal, which can lead to profitable operations for franchisees when managed effectively.
Breakeven and Payback Period
Franchisees can expect to reach breakeven within 24 months of operation, with an investment payback period of around 36 months. Understanding these timelines is critical for franchisees to assess their financial viability and plan for future growth.
Franchise Growth
As of 2019, Embassy Suites had a total of 226 franchised units, showing a steady growth trend from previous years. This expansion reflects the brand's increasing popularity and the successful implementation of its franchise model, providing potential franchisees with a robust network and support system.
Frequently Asked Questions
The initial investment for an Embassy Suites franchise ranges from approximately $17,954,895 to $85,698,315. This includes the franchise fee, construction costs, and other startup expenses.