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Hyatt House Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Initial Investment Requirements for a Hyatt House Franchise?
To start your journey with a Hyatt House franchise, you'll need to prepare for a significant initial investment ranging from $13,629,297 to $40,143,980. This includes a franchise fee of $75,000, alongside ongoing royalty and marketing fees of 5% and 3%, respectively. It's essential to have cash reserves of at least $500,000 and a net worth of $6,165,500 to meet the financial prerequisites for potential franchisees.
What Are the Financial Performance Metrics for Hyatt House Units?
Hyatt House franchises have shown promising financial performance, with an average annual revenue per unit reported at $6,667,000. The median annual revenue is even higher at $1,292,156, while the revenue range spans from $27,600 to an impressive $4,472,573. Franchisees can expect a breakeven time of approximately 24 months, with an investment payback period averaging 38 months, making it a potentially lucrative opportunity.
What Ongoing Expenses Should Hyatt House Franchisees Anticipate?
As a Hyatt House franchisee, you'll encounter various ongoing expenses that can impact your overall profitability. Key costs include general and administrative buildout costs, which can range from $305,000 to $485,000, and other miscellaneous pre-opening costs estimated between $276,000 and $375,000. Additionally, you should budget for operating supplies and equipment, which can vary significantly, as well as training expenses that range from $14,275 to $25,050.
How Has the Hyatt House Franchise Grown Over Recent Years?
The growth trajectory of the Hyatt House franchise is notable, with an increase in franchised units from 83 in 2021 to 100 in 2023. This expansion reflects the brand's appeal and the growing demand for extended-stay accommodations. The consistent addition of new units each year indicates a robust franchise model that supports both new and existing franchisees in capturing market opportunities.
Hyatt House 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:
Hyatt House 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 | 84 | 99 | 101 |
| Net Change YoY | 15 | 2 | |
| Franchised Units | 83 | 98 | 100 |
| Net Change YoY | 15 | 2 | |
| Corporate Units | 1 | 1 | 1 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Hyatt House franchise has a substantial initial investment range, with costs starting at approximately $13.6 million and potentially reaching up to $40.1 million. This investment covers various expenses, including property acquisition, construction, and operational setup, making it essential for potential franchisees to assess their financial readiness before committing.
Franchise Fees
To become a Hyatt House franchisee, an initial franchise fee of $75,000 is required. In addition to this upfront cost, franchisees must also account for ongoing royalty fees of 5% of gross sales and a marketing fee of 3%. These fees contribute to the brand's marketing efforts and ongoing support for franchisees, ensuring a cohesive brand presence.
Financial Performance
The average annual revenue for a Hyatt House unit is reported at $6.67 million, with a median revenue of $1.29 million. However, revenues can vary significantly, with the lowest annual revenue at $27,600 and the highest reaching $4.47 million. This wide range indicates the potential for profitability but also highlights the importance of location and management effectiveness in driving revenue.
Breakeven and Payback
Franchisees can expect a breakeven period of approximately 24 months, allowing them to recover their initial investment relatively quickly. The investment payback period is estimated at 38 months, providing a clearer timeline for financial planning and expectations for new franchise owners.
Franchise Growth
The Hyatt House brand has shown consistent growth in franchised units, increasing from 83 units in 2021 to 100 units in 2023. This growth reflects the brand's expanding footprint and popularity in the hospitality sector, presenting new opportunities for potential franchisees looking to enter a thriving market.
Operational Expenses
Franchisees should be prepared for various operational expenses, which can range from $1.42 million to $2.88 million annually. Key costs include general and administrative buildout, operating supplies, and pre-opening marketing efforts. Understanding these expenses is crucial for effective financial management and ensuring long-term profitability.
Frequently Asked Questions
The initial investment for a Hyatt House franchise ranges from approximately $13,629,297 to $40,143,980. This includes the franchise fee, startup costs, and other expenses associated with launching the business.