Hotel Franchise Opportunities Key Terms

You'll feel at home with these essential hotel franchise opportunities key terms

By Nikki Wheeler

There are many benefits to buying into a hotel franchise. Franchises provide the power of a recognized brand, national reservations network, advertising, purchasing, training, technology, quality assurance, and the franchise's invaluable experience and knowledge in the hotel business. There is a proven history of success in the hotel business when there is a good relationship between franchiser and franchisee, making the choice of franchise more important than ever. Keep the following hotel franchise opportunities key terms in mind when starting research.

Investment

The initial investment or start-up cost for a hotel franchise is the amount of money required upfront to buy the rights to use the hotel franchise name, and depending on the franchise, may include extra things like standard franchise decor, training and marketing.
Try: Learn more about hotel franchising fees by reading the article at HotelMarketing.com.

Royalty fee

An annual royalty is required by almost all hotel franchises to retain the right for continued brand name use; a standard amount is around 12% of annual profits.
Try: Get a better idea of how much hotel franchises require for franchise royalty fees by using the franchise fee calculator from Hotel and Motel Management.

Economy hotels

An economy hotel, or budget hotel, is a hotel that provides minimal amenities and services, but is the most economical for guests. It also requires the least amount of franchising fees.
Try: Read all about franchising an economy hotel, like a Red Roof Inn, at Red Roof Franchising.

Mid-price hotels

Mid-price, mid-range, mid-rate or moderately-priced hotels are the most popular chains, offering some amenities, extra services and added comfort for a moderate cost per night. They usually offer a complimentary breakfast, free Internet access, swimming pool and exercise room.
Try: Learn more about franchising a mid-range hotel, like Holiday Inn Express, from the International Franchise Association.

Luxury hotels

Luxury hotel franchise brand names are synonymous with comfort and service, with the highest level of customer care, extra services and attention to luxury. These hotels require the highest start-up costs and royalty fees.
Try: Consider the possibilities of investing in a luxury hotel franchise after reading the article at Franchise Prospector.

Extended-stay lodging

Extended-stay lodging refers to hotels that cater to customers staying one week or longer, usually for business, and offer things like kitchen areas and laundry areas for a more at-home feel.
Try: Find out more about the growing business travel and extended-stay lodging industry and their franchise success rates at FranchiseHandbook.com.