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TownePlace Suites Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Initial Investment Requirements for a TownePlace Suites Franchise?
To open a TownePlace Suites franchise, you should be prepared for a substantial initial investment ranging from $3,000,000 to $36,562,900. This includes a franchise fee of $75,000. Additionally, you will need to have cash available between $1,000,000 and $1,500,000, along with a net worth requirement of $500,000 to $1,000,000. These financial prerequisites are crucial for securing your franchise and ensuring you can support initial operations.
What Ongoing Fees Should You Expect as a TownePlace Suites Franchisee?
As a franchisee, you will be responsible for ongoing royalty fees of 5.5% of your revenue, as well as a marketing fee of 2%. These fees contribute to the brand's marketing efforts and support services that help drive business to your location. Being aware of these costs is important for budgeting and financial planning as you establish your franchise.
What Are the Financial Performance Expectations for a TownePlace Suites Franchise?
On average, a TownePlace Suites franchise unit generates approximately $94,417 in annual revenue, with a median revenue of $92,260. However, revenues can vary significantly, with the lowest reported at $38,330 and the highest reaching $236,740. Understanding these financial metrics can help you set realistic revenue goals and assess your potential return on investment.
How Long Does It Take to Break Even and Pay Back Your Investment?
Franchisees can expect to break even within about 24 months of operation, with an investment payback period averaging 29 months. These timelines are essential for planning your financial strategy and gauging when you might start seeing a return on your initial investment. Knowing these figures can help you manage expectations and prepare for the early stages of your franchise journey.
TownePlace Suites 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:
TownePlace Suites 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 | 446 | 475 | 486 |
| Net Change YoY | 29 | 11 | |
| Franchised Units | 436 | 469 | 480 |
| Net Change YoY | 33 | 11 | |
| Corporate Units | 10 | 6 | 6 |
| Net Change YoY | -4 | 0 |
Initial Investment
The TownePlace Suites franchise offers a significant range in initial investment, with costs ranging from $3,000,000 to $36,562,900. This investment encompasses various factors including real estate, construction, equipment, and operational setup. A franchise fee of $75,000 is also required to secure a franchise agreement, making it essential for potential franchisees to evaluate their financial readiness carefully.
Royalty and Marketing Fees
Franchisees are subject to a royalty fee of 5.5% of gross sales, alongside a marketing fee of 2%. These fees contribute to the ongoing support and brand development provided by the franchisor, ensuring franchisees benefit from a recognized brand and effective marketing strategies. Understanding these costs is crucial for financial planning and profitability analysis.
Financial Performance
TownePlace Suites units have shown robust financial performance, with an average annual revenue of $94,417 per unit. The median revenue stands at $92,260, while the revenue range varies widely from $38,330 to $236,740. This indicates potential for profitability, but also highlights the importance of location and management efficiency in achieving optimal financial results.
Breakeven and Payback Period
Franchisees can expect a breakeven period of approximately 24 months, with an investment payback time of around 29 months. These timelines provide valuable insights for prospective franchisees in assessing the financial viability and potential return on investment for their TownePlace Suites venture.
Franchise Growth
The growth trajectory of TownePlace Suites is evident, with an increase in franchised units from 436 in 2021 to 480 in 2023. This upward trend reflects the brand’s expanding market presence and the increasing demand for extended-stay accommodations, making it an attractive opportunity for new franchisees looking to enter a growing market.
Operational Insights
Franchisees should be aware of average operating expenses, which total around $50,771 annually. This includes costs such as royalty expenses, amortization, and general administrative expenses. Effective management of these costs is crucial for maintaining profitability and ensuring long-term success within the TownePlace Suites franchise system.
Frequently Asked Questions
The initial investment for a TownePlace Suites franchise ranges from approximately $3,000,000 to $36,562,900, which includes the franchise fee and other essential startup costs.