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Hospitality International Franchise ProfileRestaurant Franchises > Full-Service Restaurants |
What is the Initial Investment for a Hospitality International Franchise?
To open a Hospitality International franchise, the initial investment ranges significantly from $134,000 to $2,611,800. This includes a franchise fee of $7,500. Potential franchisees should also consider additional costs such as cash reserves, which can vary from $134,000 to $531,100, to ensure they have adequate funds for operations and unforeseen expenses.
What are the Ongoing Fees for Franchisees?
Franchisees of Hospitality International are required to pay a royalty fee of 4% on gross sales, along with a marketing fee of 3.5%. These fees contribute to the overall brand support and marketing efforts that help drive customer traffic and brand recognition. It's essential for franchisees to budget for these ongoing fees as part of their financial planning.
What is the Average Revenue and Profitability for Units?
The average annual revenue per unit for Hospitality International is approximately $325,000. With a gross profit margin of 60%, this translates to a gross profit of around $195,000. After accounting for operating expenses, which average about $150,000, franchisees can expect an EBITDA of roughly $45,000, or 13.85% of revenue, showcasing the potential profitability of the franchise.
How Long Does it Take to Break Even?
Franchisees can anticipate a breakeven period of about 12 months, making it a relatively quick return on investment compared to other franchises. With an investment payback period of 24 months, franchisees should be prepared for a focused operational strategy to achieve profitability within this timeframe, ensuring they remain financially healthy as they grow their business.
Hospitality International 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:
Hospitality International 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 | 222 | 210 | 204 |
| Net Change YoY | -12 | -6 | |
| Franchised Units | 222 | 210 | 204 |
| Net Change YoY | -12 | -6 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Hospitality International franchise offers a range of investment options, with a low initial investment starting at $134,000 and a high of $2,611,800. The franchise fee is set at $7,500, with ongoing royalty fees of 4% and a marketing fee of 3.5%. Franchisees should be prepared for a cash requirement between $134,000 and $531,100, depending on their chosen location and setup.
Revenue Potential
Franchisees can expect significant revenue potential, with average annual revenue per unit reported at $325,000. The median annual revenue is $256,500, while the revenue range spans from a low of $134,000 to a high of $531,100. This diverse revenue landscape indicates strong earning opportunities for franchise owners who effectively manage their operations.
Operational Performance
The average EBITDA for Hospitality International franchise units stands at approximately $45,000, representing about 13.85% of total revenue. With a gross profit margin of 60%, franchisees can maintain healthy profit levels after accounting for operating expenses, which average around $150,000 annually.
Breakeven Timeline
Franchisees can anticipate a breakeven period of approximately 12 months, which is relatively quick in the franchise industry. The investment payback period is estimated at 24 months, providing franchisees with a clear timeline for recovering their initial investments and starting to realize profits.
Franchise Growth
Hospitality International has demonstrated a consistent presence in the market, with 222 franchised units in 2020, decreasing slightly to 210 in 2021 and 204 in 2022. This trend reflects a stable franchise system, although prospective franchisees should consider market conditions and competition when evaluating growth potential.
Support and Training
Franchisees benefit from comprehensive support and training programs designed to ensure operational success. This includes assistance with marketing strategies, ongoing operational guidance, and access to a network of fellow franchisees. Such support systems are crucial for both new and experienced franchise owners looking to optimize their business performance.
Frequently Asked Questions
The initial investment for a Hospitality International franchise ranges from $134,000 to $2,611,800, which includes the franchise fee and other startup costs.