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Motel 6 Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a Motel 6 Franchise?
To open a Motel 6 franchise, you will need an initial investment ranging from $195,259 to $8,238,350. This includes a franchise fee of $25,000. Additionally, you should have a cash requirement between $195,259 and $1,470,540, along with a net worth requirement of $500,000 to $1,000,000. These figures highlight the financial commitment necessary to start your journey in the Motel 6 franchise system.
What Are the Ongoing Fees Associated with a Motel 6 Franchise?
Motel 6 franchisees are responsible for ongoing fees that include a royalty fee of 5% on gross sales and a marketing fee of 3%. These fees are essential for maintaining brand standards and supporting marketing efforts, which can help drive customer traffic to your location. Understanding these costs is crucial for effective financial planning and ensuring the profitability of your franchise.
What Is the Average Revenue Potential for a Motel 6 Franchise?
The average annual revenue per Motel 6 unit is approximately $70,815,612, with a median annual revenue of $36,580. Revenue can vary significantly, with the lowest annual revenue reported at $7,888 and the highest at $1,800,000. This wide range underscores the importance of location and market conditions in determining your franchise's financial performance.
How Quickly Can You Expect to Break Even with a Motel 6 Franchise?
Motel 6 franchisees can anticipate a breakeven time of around 12 months from the date of opening. This quick recovery period is appealing for many investors, as it indicates a potentially rapid return on investment. Additionally, the average investment payback period aligns with the breakeven timeline, making it a viable option for aspiring franchisees looking for a prompt financial turnaround.
Motel 6 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:
Motel 6 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 | 1205 | 1094 | 1210 |
| Net Change YoY | -111 | 116 | |
| Franchised Units | 1059 | 1090 | 1208 |
| Net Change YoY | 31 | 118 | |
| Corporate Units | 146 | 4 | 2 |
| Net Change YoY | -142 | -2 |
Initial Investment
The Motel 6 franchise offers a range of initial investment costs, starting from approximately $195,259 to as high as $8,238,350. This wide range allows for flexibility depending on location, size, and specific operational needs, making it accessible for various investors looking to enter the hospitality market.
Franchise Fees
The initial franchise fee for Motel 6 is set at $25,000. This fee grants franchisees the rights to operate under the Motel 6 brand and access to their established systems and support, which can significantly enhance the chances of success in the competitive lodging industry.
Ongoing Royalties
Franchisees are required to pay a royalty fee of 5% on gross sales, along with a marketing fee of 3%. These fees contribute to the ongoing support and marketing efforts provided by the franchisor, helping to maintain brand visibility and operational efficiency.
Financial Performance
The average annual revenue per Motel 6 unit is reported at approximately $70,815,612, with a median annual revenue of $36,580. This indicates a strong revenue potential for franchisees, although actual performance can vary widely based on location and management practices.
Breakeven and Payback
Franchisees can expect a breakeven time of around 12 months, with an investment payback period also estimated at 12 months. This quick return on investment can be appealing for entrepreneurs looking for a relatively fast path to profitability in the hospitality sector.
Growth and Expansion
Motel 6 has shown consistent growth in its franchised units, increasing from 1,059 in 2021 to 1,208 in 2023. This upward trend reflects the brand's resilience and appeal in the lodging market, providing franchisees with opportunities for support and collaboration within a growing network.
Frequently Asked Questions
The initial investment for a Motel 6 franchise ranges from $195,259 to $8,238,350, including the franchise fee of $25,000.