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Courtyard Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Initial Investment Requirements for a Courtyard Franchise?
To open a Courtyard franchise, you will need to prepare for a significant initial investment ranging from $14,444,110 to $39,361,610. This includes a franchise fee of $90,000, along with ongoing royalty fees set at 6% of gross revenue and a marketing fee of 2%. Additionally, potential franchisees must have a minimum cash requirement of $500,000 and a net worth between $500,000 and $1,000,000 to qualify for ownership.
What Is the Financial Performance of a Courtyard Franchise?
The average annual revenue per Courtyard unit is approximately $110,090, with a median revenue of $98,630. Revenue can vary widely, with the lowest annual revenue reported at $28,800 and the highest at $450,000. Franchisees can expect to breakeven within about 24 months and achieve investment payback in roughly 30 months, making it essential to understand the financial dynamics before investing.
How Many Units Are Currently Operating Under the Courtyard Brand?
As of 2023, Courtyard franchises have seen a steady increase, with 863 franchised units in operation. This represents a growth from 819 units in 2021 and 849 units in 2022. In contrast, corporate-owned units have declined from 239 in 2021 to 165 in 2023, indicating a shift toward franchising as a preferred model for expansion.
What Are the Key Operating Expenses for a Courtyard Franchise?
Operating a Courtyard franchise involves several key expenses. The cost of goods sold (COGS) accounts for about 53.8% of revenue, while operating expenses are relatively low at 1.1%. Additional expenses include related party royalty expenses averaging $26,748 annually and other administrative costs. Understanding these expenses is crucial for effective financial planning and maximizing profitability.
Courtyard 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:
Courtyard Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1058 | 1038 | 1028 |
| Net Change YoY | -20 | -10 | |
| Franchised Units | 819 | 849 | 863 |
| Net Change YoY | 30 | 14 | |
| Corporate Units | 239 | 189 | 165 |
| Net Change YoY | -50 | -24 |
Initial Investment
The Courtyard franchise requires a significant financial commitment, with an initial investment ranging from $14,444,110 to $39,361,610. This includes a franchise fee of $90,000 and a cash requirement of $500,000, ensuring that franchisees are well-prepared for the financial demands of operating a hotel.
Revenue Potential
Franchisees can expect average annual revenue of approximately $110,090 per unit, with a median revenue of $98,630. Revenue figures can vary widely, with the lowest reported at $28,800 and the highest reaching $450,000, highlighting the potential for profitability depending on location and management.
Ongoing Fees
Courtyard franchisees are subject to a royalty fee of 6% on gross sales, along with a marketing fee of 2%. These fees contribute to the brand's overall marketing efforts and ongoing support, helping to maintain brand presence and drive customer engagement.
Financial Performance
The average annual revenue across all units stands at $94,417,000, with a gross profit margin of 46.2%. Operating expenses are relatively low at just 1.1% of revenue, allowing for a robust EBITDA of 67.9%, which indicates strong financial health and operational efficiency within the franchise model.
Franchise Growth
The Courtyard franchise has shown steady growth, increasing its number of franchised units from 819 in 2021 to 863 in 2023. This upward trend reflects the brand's appeal and the successful expansion strategies employed by both franchisors and franchisees.
Breakeven and Payback
Franchisees can anticipate a breakeven time of approximately 24 months, with an investment payback period of about 30 months. These timelines are crucial for prospective franchisees to understand the time frame for achieving financial stability and profitability in their investment.
Frequently Asked Questions
The initial investment for a Courtyard franchise ranges from approximately $14,444,110 to $39,361,610, depending on various factors such as location and size of the property.