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Hilton Garden Inn Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
Initial Investment for a Hilton Garden Inn Franchise
The initial investment to open a Hilton Garden Inn franchise ranges from approximately $21,376,517 to $32,817,689. This includes a franchise fee of $100,000. Prospective franchisees should also be prepared for ongoing costs, including a royalty fee of 5.5% of gross sales and a marketing fee of 4%. A cash reserve of $400,000 to $800,000 is recommended to ensure adequate liquidity during the startup phase.
Financial Performance of Hilton Garden Inn Units
Hilton Garden Inn franchises have shown promising financial performance metrics. The average annual revenue per unit is approximately $1,659,465, with a median revenue of $5,100,000. Units can generate revenues ranging from $1,355,000 to as high as $10,000,000. With a breakeven time of about 24 months, franchisees can expect to see a return on their investment within the same timeframe, making it a potentially lucrative opportunity.
Ongoing Operational Costs for Franchisees
Franchisees should be aware of the various operational expenses associated with running a Hilton Garden Inn. While payroll, utilities, and marketing costs can vary, other expenses such as permits and licenses can range from $226,406 to $335,081 annually. Miscellaneous expenses may add another $452,813 to $670,163 to the overall costs. Understanding these expenses is crucial for effective budgeting and financial planning.
Growth and Expansion of Hilton Garden Inn
The Hilton Garden Inn franchise has experienced steady growth, increasing from 686 franchised units in 2020 to 732 in 2022. This trend indicates a strong demand for the brand and opportunities for new franchisees to enter the market. With no corporate-owned units, the franchise model focuses solely on franchised locations, fostering a community of independent operators who contribute to the brand's reputation and success.
Hilton Garden 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:
Hilton Garden 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 | 686 | 710 | 732 |
| Net Change YoY | 24 | 22 | |
| Franchised Units | 686 | 710 | 732 |
| Net Change YoY | 24 | 22 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Hilton Garden Inn franchise requires a significant initial investment, ranging from approximately $21.4 million to $32.8 million. This encompasses various costs, including real estate, construction, equipment, and other startup expenses. Potential franchisees should be prepared for this financial commitment as they embark on their hospitality journey.
Franchise Fees
Franchisees are required to pay an initial franchise fee of $100,000. In addition to this fee, there are ongoing royalty fees set at 5.5% of gross sales, along with a marketing fee of 4%. These fees support the franchise's brand development and marketing efforts, ensuring franchisees benefit from a recognized name in the industry.
Financial Performance
The average annual revenue per Hilton Garden Inn unit is approximately $1.7 million, with a median revenue figure reaching $5.1 million. Revenue can vary significantly, with the lowest reported annual revenue at $1.4 million and the highest at $10 million. This financial performance showcases the potential profitability of the franchise model.
Cash and Net Worth Requirements
To qualify for a Hilton Garden Inn franchise, potential owners must have liquid assets ranging from $400,000 to $800,000 and a minimum net worth of $6.2 million. These financial prerequisites help ensure that franchisees are adequately prepared to manage the operational demands and financial responsibilities of running a hotel.
Breakeven and Payback Period
Franchisees can expect to reach breakeven within approximately 24 months of operation. This quick payback period is indicative of the franchise’s strong market presence and operational efficiency, allowing owners to recoup their initial investment relatively quickly compared to other business models.
Franchised Units Growth
The Hilton Garden Inn franchise has shown consistent growth in its number of franchised units, increasing from 686 in 2020 to 732 in 2022. This growth trend reflects the brand's stability and appeal in the hospitality sector, making it an attractive opportunity for aspiring franchisees looking to enter a growing market.
Frequently Asked Questions
The initial investment for a Hilton Garden Inn franchise ranges from approximately $21,376,517 to $32,817,689. This includes the franchise fee, construction costs, and other startup expenses.