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Days Inn Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Initial Costs of a Days Inn Franchise?
To open a Days Inn franchise, you should be prepared for a range of initial investment costs. The total investment can vary significantly, starting as low as $196,873 and going up to $6,907,975. This includes a franchise fee of $35,000, along with ongoing royalty and marketing fees of 5.5% and 3.80%, respectively. Additionally, you’ll need to demonstrate a net worth of between $500,000 and $1,000,000, which ensures you have the financial stability to support your business.
How Profitable Is a Days Inn Franchise?
Days Inn franchises can be quite profitable, with average annual revenues per unit reported at approximately $1,498,000. The median revenue is even higher at $1,962,920, showcasing the potential for strong financial performance. The breakeven time for a new unit is around 24 months, with an investment payback period of about 36 months. This means that with effective management and marketing, franchisees can expect to see a return on their investment relatively quickly.
What Are the Ongoing Expenses for a Days Inn Franchise?
Operating a Days Inn franchise involves several ongoing expenses. Key costs include marketing, reservation, and loyalty program expenses, which total around $524,000 annually. Other significant expenses include general and administrative costs at $123,000 and operating expenses at $106,000. Overall, total annual expenses can reach approximately $974,000, which franchisees need to account for when planning their financial strategies.
What Is the Current Status of Days Inn Franchise Units?
As of the latest data, Days Inn has shown a consistent presence in the market, with 1,370 franchised units in 2020, decreasing slightly to 1,284 units by 2022. Notably, there are no corporate-owned units, indicating a fully franchised model. This trend reflects the brand's reliance on franchisees to drive growth and maintain its footprint in the hospitality industry, highlighting the importance of franchisee success for the overall brand.
Days Inn 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:
Days Inn Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 1370 | 1326 | 1284 |
| Net Change YoY | -44 | -42 | |
| Franchised Units | 1370 | 1326 | 1284 |
| Net Change YoY | -44 | -42 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Days Inn franchise offers a range of initial investment costs, with a low of $196,873 and a high of $6,907,975. This variability allows potential franchisees to choose an investment level that aligns with their financial capacity and business goals. The franchise fee is set at $35,000, making it accessible for aspiring entrepreneurs looking to enter the hospitality industry.
Ongoing Fees
Franchisees are required to pay a royalty fee of 5.5% of gross sales, along with a marketing fee of 3.80%. These ongoing fees contribute to the overall support and marketing initiatives provided by the franchisor, helping franchisees maintain competitiveness in the market.
Financial Performance
The average annual revenue per Days Inn unit is approximately $1,498,000, with a median revenue of $1,962,920. This indicates a strong potential for profitability. The lowest reported annual revenue is $52,000, while the highest can reach up to $1,910,000, showcasing the diverse performance levels among franchise locations.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 24 months of operation, with an investment payback period of around 36 months. This relatively quick return on investment can be appealing for those looking to establish a stable income stream in the hospitality sector.
Franchise Growth
Days Inn has demonstrated a steady presence in the market, with franchised units decreasing from 1,370 in 2020 to 1,284 in 2022. This trend reflects the challenges faced in the hospitality industry but also highlights opportunities for new franchisees to enter markets with less competition.
Corporate Structure
Days Inn operates under the Wyndham Hotels & Resorts umbrella, which provides franchisees with a robust support system and established brand recognition. The corporate structure ensures that franchisees benefit from the extensive resources and expertise of a leading player in the hospitality industry.
Frequently Asked Questions
The initial investment for a Days Inn franchise ranges from $196,873 to $6,907,975, which includes the franchise fee and other startup costs.