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La Quinta Inn Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What is the Initial Investment for a La Quinta Inn Franchise?
The initial investment for a La Quinta Inn franchise ranges from $4,254,021 to $15,244,470. This includes a franchise fee of $55,000. It's essential to prepare for additional costs, such as the marketing fee, which is set at 2.5% of revenue. Potential franchisees should ensure they have adequate cash reserves, as the required net worth ranges from $1,000,000 to $2,000,000.
What Are the Financial Performance Metrics for La Quinta Inn?
La Quinta Inn franchises demonstrate strong financial performance, with an average annual revenue of approximately $1,659,000 per unit. The median revenue stands at $1,498,000, with some units reporting revenues as high as $6,279,768. The breakeven time for new units is typically around 12 months, with an investment payback period of 36 months, making it a potentially lucrative investment.
What Ongoing Fees Should Franchisees Expect?
Franchisees of La Quinta Inn should be prepared for ongoing fees, including a royalty fee that ranges from 4.5% to 5% of gross revenue. Additionally, the marketing fee is set at 2.5%. These fees are crucial for maintaining brand presence and supporting corporate marketing efforts, which can contribute to the overall success of the franchise.
What Are the Trends in La Quinta Inn Franchise Units?
In recent years, La Quinta Inn has seen fluctuations in its franchised and corporate units. In 2020, there were 209 franchised units, which decreased to 137 in 2021, and no new franchised units were reported in 2022. Conversely, corporate units have also declined, indicating potential shifts in the franchise's operational strategy. Understanding these trends is vital for prospective franchisees when evaluating the brand's stability and growth potential.
La Quinta 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:
La Quinta 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 | 480 | 346 | 137 |
| Net Change YoY | -134 | -209 | |
| Franchised Units | 209 | 137 | 0 |
| Net Change YoY | -72 | -137 | |
| Corporate Units | 271 | 209 | 137 |
| Net Change YoY | -62 | -72 |
Initial Investment
The La Quinta Inn franchise requires a significant initial investment, ranging from $4,254,021 to $15,244,470. This includes a franchise fee of $55,000, which is a necessary cost for new franchisees to consider when planning their financial commitment.
Financial Performance
On average, La Quinta Inn units generate annual revenues of approximately $1,498,000, with a median revenue of $1,659,000. The highest annual revenue reported can reach up to $6,279,768, showcasing the potential for profitability in this franchise model.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee between 4.5% to 5% of gross sales, along with a marketing fee of 2.5%. These fees contribute to the brand's overall marketing efforts and support franchisees in building their local presence.
Breakeven and Payback Period
La Quinta Inn franchises have a breakeven time of approximately 12 months, indicating a relatively quick recovery of initial investments. Franchisees can expect to see a return on their investment within about 36 months, making it a potentially lucrative opportunity.
Corporate and Franchised Units
The growth of La Quinta Inn has seen fluctuations in the number of franchised and corporate units. In 2020, there were 209 franchised units, while 2021 saw a decline to 137. By 2022, all units operated were corporate, highlighting the evolving landscape of franchise ownership within the brand.
Average Operating Expenses
Franchisees should anticipate average annual operating expenses totaling around $712,883. Key expenses include signage, opening inventory, insurance, and pre-opening wages. Understanding these costs is crucial for effective financial planning and management in running a La Quinta Inn franchise.
Frequently Asked Questions
The initial investment for a La Quinta Inn franchise ranges from approximately $4,254,021 to $15,244,470, which includes the franchise fee and other startup costs.