Hotel Franchise Information

Hotels often operate as franchise businesses.

Hotel franchises allow individuals to invest in a large company while running an individual hotel operation. This gives the individual an opportunity to operate a business that is familiar to consumers and has brand-name recognition, which gives the hotel an advantage in the marketplace.

Facts

Operating a hotel franchise is quite expensive, with individuals required to invest in startup costs ranging from about $200,000 to more than $15 million. This investment also comes with an operating agreement, which binds the operator to run the organization for a specific number of years under certain conditions.

Features

Franchise companies require franchisees to pay fees and royalties for ongoing operations. Royalties may be a percentage of sales, which can become a strain if the hotel is struggling with low sales. However, hotel franchisers will often help with training the hotel operator or providing other items for running the business.

Considerations

Hotel franchises exist in a variety of styles and operating levels, from economy styles to high-end expensive hotels. Of course, the rate of investment will go up depending on the hotel franchise, with more money required for the high-end models.

References

• Entrepreneur: Hotels & Motels Franchises