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Four Points Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What Are the Investment Requirements for a Four Points Franchise?
To open a Four Points franchise, you should be prepared for a significant initial investment ranging from $10,397,410 to $29,965,810. The initial franchise fee is set at $75,000, with ongoing royalty fees of 5.50% and a marketing fee of 1%. It’s essential to have a minimum cash requirement of $75,000 and a net worth between $1,000,000 and $5,000,000 to qualify for this opportunity. Understanding these financial commitments will help you assess if this franchise aligns with your financial capabilities.
What Is the Financial Performance of a Four Points Franchise?
The average annual revenue per unit for a Four Points franchise is approximately $86,300, while the median is around $47,530. Revenue can vary significantly, with the lowest annual revenue reported at $10,000 and the highest at $2,900,000. Franchisees can expect a breakeven period of about 24 months and an investment payback period of 36 months. These figures highlight the potential profitability and financial dynamics of operating a Four Points franchise.
How Many Units Does Four Points Operate?
As of recent years, Four Points has maintained a steady presence in the market. In 2019, there were 152 total units, with 151 being franchised and 1 corporate unit. In 2020, the total units increased to 159, with 158 franchised units. However, by 2021, the total units slightly decreased to 158, maintaining the 1 corporate unit. This trend indicates a stable franchise network with a focus on growth and sustainability in operations.
What Are the Key Operational Metrics for a Four Points Franchise?
In terms of operational efficiency, the average cost of goods sold (COGS) for a Four Points franchise is approximately $33,148, which accounts for 51.2% of revenue. This results in a gross profit margin of 48.8%. Operating expenses average around $32,795, making up 50.7% of revenue. The EBITDA stands at $19,401, representing 30% of revenue. These metrics provide valuable insights into the financial health and operational performance of a Four Points franchise, helping potential franchisees gauge the business's viability.
Four Points 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:
Four Points Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total Units | 152 | 159 | 158 |
| Net Change YoY | 7 | -1 | |
| Franchised Units | 151 | 158 | 157 |
| Net Change YoY | 7 | -1 | |
| Corporate Units | 1 | 1 | 1 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Four Points franchise presents a significant investment opportunity, with initial costs ranging from $10,397,410 to $29,965,810. An initial franchise fee of $75,000 is required, alongside a cash requirement of $75,000. This investment is designed for those with a net worth between $1,000,000 and $5,000,000, making it suitable for serious investors looking to enter the hospitality sector.
Revenue Potential
Average annual revenue per unit for Four Points franchises stands at $86,300, with a median annual revenue of $47,530. The revenue range is quite broad, with the lowest annual revenue reported at $10,000 and the highest at $2,900,000. This variability highlights the potential for profitability based on location, management, and market conditions.
Operational Costs
Four Points franchisees face various operational costs, including a royalty fee of 5.50% and a marketing fee of 1%. The average cost of goods sold (COGS) is approximately 51.2% of revenue, which translates to an average annual COGS of $33,148. Understanding these costs is crucial for financial planning and maintaining profitability.
Breakeven and Payback
Franchisees can expect to reach breakeven within 24 months of operation, with an investment payback period of around 36 months. This timeline is an important consideration for prospective franchisees, as it provides insight into the speed at which they can expect to recoup their initial investment and start generating profit.
Franchise Growth
The Four Points franchise has shown stable growth over the past few years, with 151 franchised units in 2019, increasing to 158 in 2020, and slightly declining to 157 in 2021. This consistency indicates a resilient business model and a steady interest in franchise opportunities within the hospitality sector.
Corporate Structure
Four Points operates under a well-defined corporate structure, with a focus on franchise development and support. The company maintains one corporate unit, which serves as a model for franchisees. This allows for a streamlined approach to operations, ensuring that franchisees receive the necessary guidance and resources to succeed in their business endeavors.
Frequently Asked Questions
The initial investment for a Four Points franchise ranges from $10,397,410 to $29,965,810, which includes the franchise fee and other startup costs.