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Hawthorn Suites Franchise ProfileTravel Franchises > Travel Agencies |
What is the Initial Investment for a Hawthorn Suites Franchise?
To open a Hawthorn Suites franchise, you will need to prepare for a significant initial investment. This ranges from $278,443 to $13,687,303, which includes a franchise fee of $40,000. Additionally, you should consider that the cash required can vary widely, falling between $278,443 and $6,939,835, depending on the location and size of the unit. Understanding these financial commitments is crucial for aspiring franchisees to ensure they are adequately prepared.
What are the Ongoing Costs Associated with a Hawthorn Suites Franchise?
Hawthorn Suites franchisees must budget for ongoing costs, including a royalty fee of 5.5% of gross sales and a marketing fee of 2.5%. These fees are essential for maintaining brand presence and supporting marketing efforts. It's important to incorporate these ongoing expenses into your financial planning to ensure the long-term viability of your franchise.
What Financial Performance Can Franchisees Expect?
Franchisees of Hawthorn Suites can anticipate an average annual revenue of approximately $1,498,000 per unit, with a median revenue of $1,149,000. The breakeven time is estimated at 12 months, while the investment payback period is around 36 months. Understanding these financial metrics can help potential franchisees evaluate the potential return on investment and make informed decisions regarding their franchise ownership.
How Many Units Does Hawthorn Suites Operate?
As of 2022, Hawthorn Suites operates a total of 67 franchised units, with no corporate-owned locations. The number of franchised units has seen a decline from 84 in 2020 to 72 in 2021, and further to 67 in 2022. Keeping track of unit growth and market presence is vital for franchisees to assess the brand's stability and potential for future expansion.
Hawthorn 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:
Hawthorn 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 | 84 | 72 | 67 |
| Net Change YoY | -12 | -5 | |
| Franchised Units | 84 | 72 | 67 |
| Net Change YoY | -12 | -5 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Hawthorn Suites franchise offers a range of initial investment costs, with a low end of approximately $278,443 and a high end reaching up to $13,687,303. The initial franchise fee is set at $40,000, while ongoing royalty fees are 5.5% of gross sales. Franchisees should also anticipate a marketing fee of 2.5%, making it essential to budget accordingly for both startup and operational expenses.
Financial Performance
On average, each Hawthorn Suites unit generates annual revenue of about $1,498,000, with a median revenue of $1,149,000. The lowest recorded annual revenue per unit is $1,000,000, while the highest reaches $1,500,000. These figures highlight the potential profitability of investing in a Hawthorn Suites franchise, with the average EBITDA standing at 43.4% of revenue.
Breakeven and Payback Period
Franchisees can expect to reach their breakeven point within 12 months of operation. The investment payback period is approximately 36 months, which provides a clear timeline for when owners can anticipate recovering their initial investment. This relatively quick return can be appealing for those looking to enter the hospitality market.
Required Financial Qualifications
Aspiring franchisees must meet certain financial qualifications, including a net worth requirement ranging from $1,000,000 to $5,000,000. Additionally, the cash required to establish a franchise unit varies between $278,443 and $6,939,835, depending on location and specific operational needs. This financial threshold helps ensure that franchisees are adequately prepared for the investment.
Franchise Growth Trends
The Hawthorn Suites franchise has experienced a gradual decline in the number of franchised units, with 84 units in 2020, 72 in 2021, and 67 in 2022. This trend may indicate a need for prospective franchisees to carefully evaluate market conditions and the competitive landscape before entering the franchise system.
Operational Expenses
While specific costs like rent and utilities are not detailed, franchisees can expect to allocate between $20,000 and $45,000 for marketing and advertising annually. Other expenses, such as insurance, range from $15,000 to $30,000, and additional funds for the initial three-month period can vary between $91,128 and $273,385. Understanding these ongoing costs is crucial for effective financial planning and management.
Frequently Asked Questions
The initial investment for a Hawthorn Suites franchise ranges from $278,443 to $13,687,303, which includes the franchise fee and other startup costs.