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Hampton Inn Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Initial Investment Requirements for a Hampton Inn Franchise?
To open a Hampton Inn franchise, prospective owners should prepare for an initial investment ranging from $15,212,514 to $25,864,165. This includes a franchise fee of $100,000, along with additional costs for construction, equipment, and other startup expenses. Franchisees will also need to have a cash reserve of $400,000 to $800,000 and a net worth of at least $6,165,500 to qualify for ownership. Understanding these financial commitments is crucial for anyone considering this opportunity.
What Are the Ongoing Fees Associated with a Hampton Inn Franchise?
Hampton Inn franchisees are required to pay a royalty fee of 6% on their gross revenue, which contributes to the brand's overall support and operational resources. Additionally, there is a marketing fee of 4% that helps fund national and regional advertising efforts. These ongoing fees are essential for maintaining brand visibility and ensuring a consistent customer experience across all locations.
What Is the Financial Performance of a Hampton Inn Franchise?
On average, a Hampton Inn franchise unit generates an annual revenue of approximately $1,376,897. The median revenue reported is $1,200,000, with some units achieving as much as $10,000,000 in revenue. With a breakeven time of 24 months, franchisees can expect to see a return on their investment within the same timeframe. This financial performance highlights the potential profitability of operating a Hampton Inn franchise.
How Many Hampton Inn Units Are Currently Operating?
As of 2023, there are 1,346 Hampton Inn franchise units in operation, reflecting steady growth from 1,323 units in 2021. The brand has consistently expanded its footprint, indicating a solid demand for its offerings. Notably, all units are franchised, with no corporate-owned locations, showcasing the brand's commitment to its franchise model. This growth trajectory can be appealing for potential franchisees looking to join a well-established brand.
Hampton 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:
Hampton Inn 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 | 1,323 | 1,331 | 1,346 |
| Net Change YoY | 8 | 15 | |
| Franchised Units | 1,323 | 1,331 | 1,346 |
| Net Change YoY | 8 | 15 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Company Background
Hampton Inn is a well-recognized hotel chain that offers comfortable accommodations at a reasonable price. Established in 1984, it has grown to become a leading brand in the mid-scale hotel segment, known for its consistent quality and customer service. With over 1,300 locations across the United States and internationally, Hampton Inn caters to both business and leisure travelers, providing amenities such as free hot breakfast, Wi-Fi, and a friendly atmosphere.
Franchise Opportunity
Investing in a Hampton Inn franchise presents a strong opportunity for aspiring entrepreneurs looking to enter the hospitality industry. The brand's reputation for quality and service, combined with its comprehensive support for franchisees, makes it an attractive choice. With a proven business model and a focus on customer satisfaction, franchisees can benefit from a well-established system that drives profitability and growth.
Investment Requirements
To become a Hampton Inn franchisee, the initial investment ranges from $15,212,514 to $25,864,165. This includes a franchise fee of $100,000, along with a cash requirement of $400,000 to $800,000 and a net worth requirement of approximately $6,165,500. These investment parameters ensure that franchisees are well-prepared to manage their operations effectively and contribute to the brand's success.
Royalty and Marketing Fees
Hampton Inn franchisees are required to pay a royalty fee of 6% of gross sales, along with a marketing fee of 4%. These fees support the brand's marketing initiatives and ongoing operational support, which are crucial for driving customer traffic and maintaining brand visibility in a competitive market.
Financial Performance
The average annual revenue for a Hampton Inn unit is approximately $1,376,897, with a median revenue of $1,200,000. This financial performance highlights the potential for profitability within the franchise. Additionally, franchisees can expect a breakeven time of around 24 months, which is a favorable timeline for recouping their initial investment.
Growth Trends
Hampton Inn has shown consistent growth in its franchise units, with an increase from 1,323 units in 2021 to 1,346 units in 2023. This upward trend reflects the brand's resilience and continued demand for quality lodging options. As the hospitality industry rebounds, Hampton Inn is well-positioned for further expansion and success in the coming years.
Frequently Asked Questions
The initial investment for a Hampton Inn franchise ranges from approximately $15,212,514 to $25,864,165, which includes the franchise fee and other startup costs.