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MainStay Suites Franchise ProfileLodging & Leisure > Lodging |
What is the Initial Investment for a MainStay Suites Franchise?
To open a MainStay Suites franchise, you should expect an initial investment ranging from $268,650 to $14,948,447. This includes a franchise fee of $50,000. Potential franchisees need to have cash readily available between $268,650 and $1,746,195, along with a net worth requirement of $500,000 to $1,000,000. Understanding these financial commitments is crucial for anyone considering this opportunity.
What are the Ongoing Fees Associated with a MainStay Suites Franchise?
Franchisees of MainStay Suites are required to pay ongoing fees, which include a royalty fee of 6.00% of gross revenue and a marketing fee of 2.50%. These fees contribute to the overall operational costs and marketing support provided by the franchisor, ensuring that franchisees can effectively promote their business and maintain brand standards.
What is the Average Revenue Potential for a MainStay Suites Franchise?
The average annual revenue per unit for a MainStay Suites franchise is approximately $1,469,293. However, revenue can vary significantly, with the lowest reported annual revenue at $19,860 and the highest at $139,160. Understanding this revenue range can help potential franchisees gauge the financial viability of their investment and set realistic expectations for their business performance.
How Long Does It Take to Break Even with a MainStay Suites Franchise?
Franchisees can expect a breakeven time of about 24 months after opening their MainStay Suites location. The investment payback period is estimated at 29 months, which indicates the time it may take to recover the initial investment. Knowing these timelines can help aspiring franchisees plan their finances and operational strategies effectively.
MainStay 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:
MainStay 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 | 73 | 90 | 101 |
| Net Change YoY | 17 | 11 | |
| Franchised Units | 73 | 90 | 101 |
| Net Change YoY | 17 | 11 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The MainStay Suites franchise offers a range of initial investment costs, with a low end of approximately $268,650 and a high end reaching up to $14,948,447. This broad range allows for flexibility depending on location, property size, and specific market conditions. The initial franchise fee is set at $50,000, making it accessible for aspiring franchisees looking to enter the hospitality sector.
Financial Performance
Franchisees can expect an average annual revenue per unit of $1,469,293, with a median revenue of $56,600. The lowest recorded annual revenue stands at $19,860, while the highest reaches $139,160. This performance indicates a potential for strong revenue generation, though results can vary significantly based on location and management effectiveness.
Royalty and Marketing Fees
MainStay Suites charges a royalty fee of 6.00% on gross sales, alongside a marketing fee of 2.50%. These fees are essential for maintaining brand standards and supporting collective marketing efforts, which can enhance visibility and customer acquisition for franchisees.
Required Financial Qualifications
Prospective franchisees must demonstrate a net worth between $500,000 and $1,000,000. Additionally, a cash requirement ranging from $268,650 to $1,746,195 is necessary to ensure that franchisees have sufficient capital to cover initial setup costs and operational expenses during the early stages of business.
Breakeven and Payback Period
The average breakeven time for a MainStay Suites franchise is approximately 24 months, with an investment payback period of around 29 months. These timelines can help franchisees plan their financial strategies and set realistic expectations for their return on investment.
Growth and Expansion
As of 2022, MainStay Suites has seen consistent growth, increasing from 73 franchised units in 2020 to 101 in 2022. This upward trend reflects the brand's expanding market presence and the increasing demand for extended-stay accommodations, presenting a promising opportunity for new franchisees looking to invest in a growing segment of the hospitality industry.
Frequently Asked Questions
The initial investment for a MainStay Suites franchise ranges from $268,650 to $14,948,447. This includes the franchise fee of $50,000 and other startup costs associated with the business.