|
Suburban Extended Stay Hotel Franchise ProfileLodging & Leisure > Lodging |
What Are the Initial Investment Requirements for a Suburban Extended Stay Hotel Franchise?
To open a Suburban Extended Stay Hotel franchise, you should anticipate an initial investment ranging from $158,450 to $8,519,444. The franchise fee is set at $30,000, with additional costs including a 6% royalty fee and a 2.5% marketing fee. Aspiring franchisees need to have a cash requirement between $145,000 and $350,000, along with a net worth of $500,000 to $1,000,000. These financial prerequisites are crucial for ensuring the franchisee can support the business's initial operational phase.
What Is the Average Revenue Potential for Suburban Extended Stay Hotel Franchisees?
The average annual revenue for a Suburban Extended Stay Hotel franchise unit is approximately $1,069,300, with a median revenue of $39,600. However, revenue can vary significantly, with the lowest reported annual revenue at $14,040 and the highest reaching $1,061,000. Understanding this revenue potential can help franchisees gauge their expected financial performance and plan accordingly for expenses and profitability.
What Are the Typical Expenses Associated with Running a Suburban Extended Stay Hotel Franchise?
Running a Suburban Extended Stay Hotel involves various expenses that can range widely. Annual costs for insurance may vary between $2,000 and $70,000, while advertising expenses can fall between $2,500 and $40,000. Management and administrative salaries can range from $145,000 to $350,000. Overall, total running expenses can amount to between $149,500 and $460,000 annually. Being aware of these costs is essential for effective budgeting and financial planning.
How Long Does It Typically Take to Break Even with a Suburban Extended Stay Hotel Franchise?
Franchisees can expect to reach their breakeven point in about 18 months. This timeframe is critical for new investors to consider, as it indicates how long it may take before the business starts generating profit. Additionally, the investment payback period is estimated to be around 69 months, providing a clear timeline for when franchisees can anticipate recovering their initial investment. Understanding these timelines can help in setting realistic financial goals and expectations.
Suburban Extended Stay 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:
Suburban Extended Stay Hotel Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total Units | 60 | 66 | 71 |
| Net Change YoY | 6 | 5 | |
| Franchised Units | 60 | 66 | 71 |
| Net Change YoY | 6 | 5 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Suburban Extended Stay Hotel franchise offers a range of initial investment costs, with a low end of approximately $158,450 and a high end reaching up to $8,519,444. This broad range allows for flexibility depending on location, size, and specific property requirements, making it accessible for various levels of investors.
Franchise Fees
To join the Suburban Extended Stay Hotel franchise, an initial franchise fee of $30,000 is required. Additionally, franchisees must pay a royalty fee of 6% on gross sales and a marketing fee of 2.5%. These fees contribute to the ongoing support and marketing efforts provided by the franchisor, ensuring brand consistency and visibility.
Financial Performance
Franchisees can expect average annual revenue per unit around $1,069,300, with median revenue at $39,600. The financial performance varies widely, with the lowest annual revenue reported at $14,040 and the highest at $1,061,000. This range highlights the potential for profitability, influenced by location and management efficiency.
Breakeven and Payback
The average breakeven time for a Suburban Extended Stay Hotel franchise is approximately 18 months, indicating a relatively quick return on investment. Franchisees can anticipate an investment payback period of about 69 months, which is crucial for planning financial strategies and cash flow management.
Required Financial Qualifications
To qualify for a Suburban Extended Stay Hotel franchise, prospective franchisees must have a net worth between $500,000 and $1,000,000. Additionally, a cash requirement of $145,000 to $350,000 is necessary, ensuring that franchisees have adequate financial resources to support their business operations and initial expenses.
Growth and Expansion
The Suburban Extended Stay Hotel franchise has shown consistent growth, increasing from 60 franchised units in 2019 to 71 in 2021. This trend indicates a strong demand for the brand and potential for further expansion, making it an attractive option for investors looking to enter a growing market in the hospitality sector.
Frequently Asked Questions
The initial investment for a Suburban Extended Stay Hotel franchise ranges from $158,450 to $8,519,444, depending on various factors such as location and size of the property.