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Sleep Inn Franchise ProfileLodging & Leisure > Lodging |
What is the Initial Investment for a Sleep Inn Franchise?
To open a Sleep Inn franchise, you should be prepared for an initial investment ranging from $7,322,750 to $9,173,695. This includes a franchise fee of $48,750, along with additional costs for construction, equipment, and other startup expenses. It’s crucial to have liquid capital available, typically between $125,000 and $270,000, to ensure you can cover initial costs and sustain operations during the early phases.
What are the Ongoing Fees Associated with a Sleep Inn Franchise?
Sleep Inn franchisees are subject to ongoing fees that include a royalty fee of 5.5% of gross sales and a marketing fee of 3.50%. These fees contribute to the overall support and brand marketing provided by the franchisor. Understanding these ongoing financial commitments is essential for maintaining profitability and ensuring the success of your franchise unit.
What is the Average Revenue Potential for a Sleep Inn Franchise?
The average annual revenue for a Sleep Inn unit is approximately $57,180, with a median revenue figure of $1,171,000. However, revenue can vary significantly, with the lowest reported annual revenue at $13,930 and the highest at $149,000. This variance highlights the importance of location, market demand, and operational efficiency in determining your franchise's financial performance.
What is the Breakeven Timeline for a Sleep Inn Franchise?
Franchisees can expect a breakeven period of around 24 months, with an investment payback timeframe of approximately 72 months. This timeline can vary based on factors such as market conditions, management practices, and customer engagement. Understanding these metrics is vital for planning your financial strategy and setting realistic expectations for your franchise journey.
Sleep 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:
Sleep 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 | 402 | 408 | 414 |
| Net Change YoY | 6 | 6 | |
| Franchised Units | 402 | 408 | 414 |
| Net Change YoY | 6 | 6 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Company Background
Sleep Inn is a part of the Choice Hotels International family, offering affordable, comfortable accommodations primarily for business and leisure travelers. With a focus on quality and convenience, Sleep Inn features modern design and amenities that cater to the needs of guests seeking a restful stay. The brand has established a strong presence in the hospitality industry, with hundreds of locations across the United States and beyond, providing a reliable option for travelers.
Franchise Opportunity
Investing in a Sleep Inn franchise presents an exciting opportunity for aspiring entrepreneurs looking to enter the hospitality sector. With a relatively low initial investment range of $7,322,750 to $9,173,695 and a franchise fee of $48,750, franchisees can tap into the growing demand for quality lodging. The brand's established reputation and support from Choice Hotels International enhance the potential for success in this competitive market.
Financial Requirements
To qualify for a Sleep Inn franchise, potential franchisees must meet specific financial criteria. This includes a net worth requirement of $1,000,000 to $1,500,000 and cash reserves ranging from $125,000 to $270,000. These requirements ensure that franchisees have the necessary financial stability to invest in and operate a successful Sleep Inn location, contributing to the overall brand's strength and growth.
Royalty and Marketing Fees
Sleep Inn franchisees are subject to a royalty fee of 5.5% of gross sales, along with a marketing fee of 3.5%. These fees are essential for maintaining brand standards and supporting ongoing marketing efforts that drive customer traffic to franchise locations. By investing in these fees, franchisees benefit from a well-recognized brand and comprehensive marketing strategies that enhance their business visibility.
Performance Metrics
The average annual revenue per Sleep Inn unit is approximately $57,180, with a median annual revenue of $1,171,000. Franchisees can expect a breakeven period of around 24 months, with an investment payback period of 72 months. These metrics provide valuable insights into the potential profitability of a Sleep Inn franchise, helping prospective owners make informed decisions about their investment.
Growth and Expansion
Sleep Inn has demonstrated consistent growth, with an increase in franchised units from 402 in 2020 to 414 in 2022. This upward trend indicates strong brand performance and demand, positioning Sleep Inn as a viable option for franchisees seeking to capitalize on the growing hospitality market. The brand's commitment to expansion reflects its dedication to providing quality accommodations while offering franchisees the opportunity to be part of a thriving network.
Frequently Asked Questions
The initial investment for a Sleep Inn franchise ranges from approximately $7,322,750 to $9,173,695. This includes various costs such as the franchise fee, construction, equipment, and other startup expenses.