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Kimpton Hotels & Restaurants Franchise ProfileLodging & Leisure > Lodging |
Investment Overview for Kimpton Hotels & Restaurants Franchise
To embark on a journey with Kimpton Hotels & Restaurants, prospective franchisees should be prepared for a significant initial investment. The total investment ranges from approximately $3.5 million to $3.7 million, including a franchise fee of $50,000. Franchisees should also have liquid cash of $1 million to $2.5 million and a net worth between $1 million and $5 million. This financial foundation is crucial for navigating the operational costs and ensuring a smooth start in the hospitality industry.
Revenue Potential for Kimpton Hotels & Restaurants Franchise
Kimpton Hotels & Restaurants franchises have demonstrated strong revenue potential, with average annual revenue per unit reaching $3.5 million. The revenue can vary significantly, with the highest reported at over $3.5 million and the lowest at $67,771. With effective management and strategic marketing, franchisees can aim for healthy profit margins, although they should be mindful of the operating expenses that typically account for about 15.9% of revenue.
Franchise Growth and Market Presence
Kimpton Hotels & Restaurants has shown consistent growth in its franchise network, expanding from 5 franchised units in 2021 to 17 in 2023. This upward trend reflects the brand's increasing market presence and appeal. With 55 corporate units also in operation, Kimpton continues to strengthen its position in the hospitality sector, providing franchisees with a robust support system and established brand recognition.
Operational Insights and Financial Performance
Operating a Kimpton Hotels & Restaurants franchise involves managing various expenses, including property taxes, maintenance, and marketing, which collectively total around $733,421 annually. Franchisees should anticipate a breakeven period of approximately 24 months, with a potential payback on their investment within just 12 months. Understanding these financial metrics is essential for effective budgeting and ensuring long-term profitability in the competitive hotel and restaurant industry.
Kimpton Hotels & Restaurants 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:
Kimpton Hotels & Restaurants 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 | 50 | 56 | 72 |
| Net Change YoY | 6 | 16 | |
| Franchised Units | 5 | 11 | 17 |
| Net Change YoY | 6 | 6 | |
| Corporate Units | 45 | 50 | 55 |
| Net Change YoY | 5 | 5 |
Company Background
Kimpton Hotels & Restaurants is a distinctive hospitality brand known for its boutique hotels and innovative dining experiences. Founded in 1981, Kimpton has established a reputation for personalized service and a unique approach to hotel design, focusing on creating memorable guest experiences. With a portfolio that includes over 70 hotels and 80 restaurants across the United States, Kimpton emphasizes local culture and community, offering guests a vibrant and authentic atmosphere during their stay.
Franchise Opportunity
Investing in a Kimpton Hotels & Restaurants franchise presents a unique opportunity in the growing hospitality industry. Franchisees benefit from a recognized brand, comprehensive training, and ongoing support. With a focus on boutique experiences, Kimpton attracts a diverse clientele seeking personalized service and unique accommodations. This franchise model is ideal for aspiring entrepreneurs who are passionate about hospitality and looking to tap into a lucrative market with strong revenue potential.
Corporate Structure
Kimpton Hotels & Restaurants operates under the umbrella of InterContinental Hotels Group (IHG), a global leader in hospitality. The brand's corporate headquarters is located in San Francisco, California, where it was founded. Kimpton maintains a commitment to its boutique roots while leveraging the resources and expertise of IHG to expand its footprint and enhance guest experiences across its portfolio of hotels and restaurants.
Royalties
Franchisees of Kimpton Hotels & Restaurants are required to pay a royalty fee of 5% of gross sales. Additionally, a marketing fee of 3% is applied to support brand-wide advertising and promotional efforts. These fees ensure that franchisees benefit from a strong brand presence and marketing initiatives designed to drive traffic and increase revenue at their locations.
Financial Performance
The average annual revenue per unit for Kimpton Hotels & Restaurants is approximately $208,915, with a median annual revenue of $96,630. Franchisees can expect a breakeven time of around 24 months, with an investment payback period of just 12 months. This financial performance highlights the potential for profitability and growth within the franchise model, making it an attractive option for investors.
Investment Requirements
To become a Kimpton Hotels & Restaurants franchisee, an initial investment ranges from $3,500,000 to $3,707,470, with a franchise fee of $50,000. Franchisees must have a net worth of $1,000,000 to $5,000,000 and liquid cash available between $1,000,000 and $2,500,000. These requirements ensure that franchisees are financially prepared to operate a successful hotel or restaurant, contributing to the overall strength of the Kimpton brand.
Frequently Asked Questions
The initial investment for a Kimpton Hotels & Restaurants franchise ranges from approximately $3,500,000 to $3,707,470, which includes the franchise fee and other startup costs.