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Hyatt Place Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What is the Initial Investment for a Hyatt Place Franchise?
The initial investment to open a Hyatt Place franchise ranges from approximately $13.6 million to $40.1 million. This includes a franchise fee of $75,000 and requires a cash amount of $500,000. It’s essential to prepare for various startup costs, including construction, equipment, and pre-opening expenses, which can significantly impact the total investment.
What are the Financial Performance Metrics for Hyatt Place?
Hyatt Place franchises have shown promising financial performance. The average annual revenue per unit is around $6.7 million, with a median revenue of approximately $3 million. Franchisees can expect a breakeven period of about 24 months and a payback on investment in roughly 29 months, making it a potentially lucrative opportunity for those ready to enter the hospitality sector.
What are the Ongoing Fees Associated with a Hyatt Place Franchise?
Franchisees of Hyatt Place are subject to ongoing fees that include a royalty fee of 5% of gross revenue and a marketing fee of 5%. These fees contribute to brand support and national marketing efforts, which can enhance visibility and drive customer traffic to your location. Understanding these costs is crucial for maintaining profitability.
How Many Hyatt Place Units Are Currently Operating?
As of 2023, Hyatt Place has a total of 320 operating units, with 317 being franchised and 3 corporate-owned. This growth reflects a steady increase in franchised units over the past few years, indicating a robust demand for the brand and a strong franchise model that supports expansion in the hospitality market.
Hyatt Place 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 Place 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 | 296 | 312 | 320 |
| Net Change YoY | 16 | 8 | |
| Franchised Units | 292 | 309 | 317 |
| Net Change YoY | 17 | 8 | |
| Corporate Units | 4 | 3 | 3 |
| Net Change YoY | -1 | 0 |
Investment Overview
The initial investment to open a Hyatt Place franchise ranges from $13,629,297 to $40,143,980. This includes a franchise fee of $75,000, with ongoing royalty and marketing fees set at 5% each. Franchisees should be prepared to have a minimum cash requirement of $500,000 and a net worth of at least $6,165,500 to qualify for this opportunity.
Revenue Potential
Hyatt Place franchises have demonstrated strong revenue potential, with an average annual revenue of $1,996,906 per unit and a median revenue of $3,028,000. The performance can vary significantly, with the lowest annual revenue reported at $69,610 and the highest reaching $10,192,000. This range indicates the importance of location and management in maximizing profitability.
Operational Metrics
Franchisees can expect a breakeven period of approximately 24 months, with an investment payback period of around 29 months. These metrics highlight the importance of effective operations and customer engagement in achieving financial stability and growth within the Hyatt Place model.
Franchise Growth
The Hyatt Place brand has shown consistent growth in its franchised units, increasing from 292 units in 2021 to 317 units in 2023. This upward trend reflects the brand's expanding market presence and the increasing demand for its services in various locations.
Corporate Structure
Hyatt Place operates under the umbrella of Hyatt Hotels Corporation, a well-established leader in the hospitality industry. The corporation's strong reputation and extensive resources provide franchisees with valuable support and access to a broad customer base, enhancing their potential for success.
Financial Insights
Franchisees should be aware of the financial landscape, including an average annual revenue of $6,667,000 across units. Key expenses include cost of goods sold at approximately 47.14% of revenue and operating expenses at 92.49%. Understanding these metrics is essential for effective financial management and strategic planning in the Hyatt Place franchise.
Frequently Asked Questions
The initial investment for a Hyatt Place franchise ranges from approximately $13,629,297 to $40,143,980, which includes various startup costs such as the franchise fee, equipment, and other essential expenses.