Microtel Inns and Suites
Date of Incorporation: 1995
Franchising Since: 1995
Address: Atlanta, Georgia
Country: USA
Description: The franchise operates all new construction budget Microtel Inns & Suites hotels, which feature modern up-scale accommodations, down-sized guest rooms, or one-room suites, and budget room rates.
Franchise Offer: The franchisor offers franchises for the right to operate all-new construction, economy/budget lodging facilities that use the Hotel System and are identified by the proprietary marks. Microtel Inn & Suites contain single rooms, double rooms and suites.
Financial Assistance: Under certain circumstances the franchisor may provide financial assistance to selected franchisees to help them develop hotel properties or may permit the franchisee to pay the application fee over a period of time instead of in a lump sum. Except as outlines above, the franchisor does not provide any financing arrangements for franchisees, either directly or indirectly.
Training and Assistance: The franchisee must attend the initial training program, before the opening or within 90 days after the opening of the hotel. The initial training program will consist of (i) classroom instruction on subjects relating to our operations manual; (ii) familiarization with our personnel and management; and (iii) a basic review of your front office, housekeeping, maintenance, and safety program responsibilities. It is based at headquarters in Atlanta, Georgia.
Territory: The franchisee is granted an exclusive territory. The territory is based on factors including, but not limited to, market size, size of the hotel, proximity to other budget lodging facilities, and other demand generators. The size may range from a mile or less around the Hotel to several miles around the Hotel.
Term of Agreement and Renewal: The initial franchise term is for a length of 20 years, with an option to renew for an additional 10 years.
Obligations and Restrictions: The franchisee must maintain direct management responsibility over the hotel; however, it is not required that they personally supervise the hotel.
Total Number of Units: 273 franchised units at the end of 2007
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Application Fee | Greater of $40,000 or $400 per room | |
| Architect fees | $40,000 | $60,000 |
| Re-construction costs | $200,000 | $400,000 |
| Leasehold Construction | $3,500,000 | $5,400,000 |
| Furniture, Fixtures, Equipment | $535,000 | $650,000 |
| Insurance | $20,000 | $50,000 |
| Business permits, utility deposits | $10,000 | $30,000 |
| Training | $5,500 | $10,500 |
| Opening local Advertising | $10,000 | $20,000 |
| Telephone Reservation Hook-up | $300 | $1,000 |
| Opening Inventory & Supplies | $65,000 | $70,000 |
| Mandatory On-premises sign | $25,000 | $50,000 |
| Additional Funds – 3 months | $50,000 | $75,000 |
| Total | $4,500,800 | $6,856,500 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty Fees | 5% or 6% of Gross Room Revenue |
| Marketing/Reservation Contributions | 2% or 3% of Gross Room Revenue |
| Cooperative Advertising | Varies |
| Audit | Understated amount plus accounting and attorneys' fees |
| Interest | Lesser of 1.5% per month or the maximum rate permitted by law on the unpaid amount |
| Accounting | Cost of accounting services |
| Expansion Fees | $2,500 per request |
| Transfer Fees | $10,000 |
| Proposed securities offering fee | $5,000 |
| Liquidated Damages upon Termination, Condemnation or Casualty | $3,000 per approved Guest Room or 36 times average monthly fees (royalty and marketing/ reservation/contribu¬tion) payable under License Agreement |
| Re-identification fees | $5,000 per day |
| Renewal Fee | One-half then-current Application Fee |
| Indemnification | Varies |
| Trust International, Inc. Reservation Set-up Fee | $446 |
| Trust International, Inc. 2-Way Interface Fee | $0.26 per each reservation uploaded to Trust via the 2-way interface. |
| Global Distribution System Provider Fees and Processing Agent fees | Processing agent fee of $1 per transaction |
| Transaction fee for central pay on-line travel agent commission settlement program | $0.32 per travel agency booking |
| Facsimile Transmission of Reservations | $1.00 per reservation |
| Testing of New Product/Supplies | Franchisor’s costs if they seek reimbursement |
| Attorneys' Fees | As incurred |
| Tax on Gross Receipts | Actual costs |
| Call Waiting Charge | Up to $2 per call |
| Fee for annual conference | Currently $599 per attendee |
| Branded @microtelinn.com hotel e-mail accounts for the GM and Sales | Every hotel will be charged $15 annually |
| Payment Card Industry (PCI) Compliance Quarterly Network Scans by PCI Auditors | $25.00 per year per Hotel that will cover 4 scans per year for 1 internet provider address |
Date of FDD: 2008
The above information has been taken from the UFOC/FDD and online sources of Microtel Inns and Suites.
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