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Marriott Hotel Franchise ProfileLodging & Leisure > Lodging |
What Are the Initial Investment Requirements for a Marriott Hotel Franchise?
To open a Marriott Hotel franchise, you should be prepared for a significant financial commitment. The initial investment ranges from approximately $95,892,590 to $239,254,490, which includes a franchise fee of $120,000. Additionally, you need to have at least $3,000,000 in cash readily available and a net worth between $150,000 and $500,000. These financial prerequisites ensure that franchisees have the necessary resources to successfully launch and operate their hotel.
What Are the Ongoing Fees Associated with a Marriott Hotel Franchise?
Once you’re up and running, Marriott Hotel franchisees are required to pay ongoing fees to the franchise. This includes a royalty fee of 6% of gross revenue and a marketing fee of 1%. These fees contribute to the overall brand support and marketing efforts that help drive business to your hotel, ensuring you benefit from Marriott's established reputation and customer loyalty.
What Is the Revenue Potential for a Marriott Hotel Franchise?
The revenue potential for a Marriott Hotel franchise can be substantial. The average annual revenue per unit is around $92,000, with a median of $99,830. However, revenues can vary significantly, with the lowest annual revenue reported at $40,020 and the highest reaching $586,790. This range indicates the potential for profitability, depending on factors like location, management, and market demand.
How Long Does It Take to Break Even with a Marriott Hotel Franchise?
Franchisees should anticipate a breakeven period of about 24 months. This timeframe can vary based on numerous factors, including operational efficiency and market conditions. After reaching breakeven, the investment payback period is estimated at 42 months, allowing franchisees to start seeing a return on their investment. Understanding these timelines is crucial for planning your financial strategy as a Marriott franchise owner.
Marriott Hotel 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:
Marriott Hotel 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 | 364 | 368 | 369 |
| Net Change YoY | 4 | 1 | |
| Franchised Units | 230 | 236 | 243 |
| Net Change YoY | 6 | 7 | |
| Corporate Units | 134 | 132 | 126 |
| Net Change YoY | -2 | -6 |
Initial Investment
The initial investment for a Marriott Hotel franchise ranges from $95,892,590 to $239,254,490. This substantial investment reflects the brand's reputation and quality, ensuring franchisees are equipped to meet the high standards expected by guests.
Franchise Fees
Franchisees are required to pay an initial franchise fee of $120,000, alongside ongoing royalty fees of 6% of gross sales and a marketing fee of 1%. These fees contribute to the brand's marketing efforts and operational support, providing franchisees with valuable resources to drive success.
Financial Performance
On average, Marriott Hotel franchises generate annual revenues of approximately $92,000, with a median revenue of $99,830. The revenue range varies significantly, with some units achieving as high as $586,790 annually, showcasing the potential for profitability within the franchise model.
Breakeven and Payback
Franchisees can expect to reach breakeven within 24 months of operation, with an investment payback period averaging 42 months. This timeline is crucial for potential investors to understand the return on their investment and the time commitment required for financial stability.
Net Worth Requirements
To qualify for a Marriott Hotel franchise, prospective franchisees must demonstrate a net worth ranging from $150,000 to $500,000. Additionally, a minimum cash requirement of $3,000,000 is necessary to ensure franchisees have adequate resources to support their business during the initial stages.
Growth and Expansion
As of 2022, Marriott operates 369 total units, with 243 being franchised. The steady growth in franchised units from 230 in 2020 to 243 in 2022 indicates a strong demand for the brand and presents a promising opportunity for aspiring franchisees looking to enter the hospitality industry.
Frequently Asked Questions
The initial investment for a Marriott Hotel franchise ranges from approximately $95,892,590 to $239,254,490. This includes the franchise fee, equipment, and other startup costs.