Travelodge Franchise Cost & Fees
Date of Incorporation: 1996
Franchising Since: 1996
Description: Travelodge Hotels, Inc is a subsidiary of Wyndham Hotel Group, LLC, a Delaware limited liability company which is owned by Wyndham Worldwide Corporation, a Delaware corporation. A Travelodge Inn facility features design, decor, guest room furnishing, and other standards which are similar to those of a Travelodge Hotel facility. However, it is usually smaller in size and because restaurant, bell and similar services are not provided, room rates are generally lower. A Travelodge Inn & Suites facility is comprised of suites and inn rooms and offers the same amenities as a Travelodge Inn facility. A Travelodge Hotel facility is a full-service facility, offering comfortable, attractive accommodations at mid to upper mid-level rates. A typical Travelodge Hotel facility has a full-service restaurant and cocktail lounge (where legally permitted), a meeting room having a minimum of 600 square feet, bell service upon request, laundry/valet service, and a swimming pool. A Travelodge Suites Hotel facility is mostly comprised of two-room suites and offers the same amenities as a Travelodge Hotel facility.
Franchise Offer: Under the franchise agreement the franchisors offers a license to operate a Travelodge Chain guest lodging facility at a single, defined location. The franchisee will operate a Travelodge® guest lodging facility franchise offering overnight accommodations and related services.
Financial Assistance: The franchisor may defer payment of the initial fee, if business circumstances warrant, in their sole discretion, for a fixed period that will generally not exceed one year. The deferral is usually for a short term such as 90 days, or until the facility opens as a chain facility, whichever occurs first.
Training and Assistance: Wyndham Hotel Group's Global Training Department offers a variety of mandatory and optional training programs, seminars, online training and other training resources. The initial and any replacement general manager or an owner/operator or other representative who exercises day to day operational authority of the facility must attend the Strategic Training for Exceptional Performance or Advanced Strategic Training for Exceptional Performance training program as well as any supplemental Internet-based training the franchisor may require.
Territory: The franchisor grants to the franchisee a protected territory in which the franchisor will not own, operate or manage another Chain Facility utilizing the same service mark. In addition, the franchisor will not grant any additional license using the same service mark in the protected territory after the franchisee executes a franchise agreement with Travelodge Hotels.
Term of Agreement and Renewal: The term of the franchisee agreement is 20 years for a new construction facility and 15 years for a conversion facility. The franchisee is not given any renewal or extension rights.
Obligations and Restrictions: The franchisor does not have to participate personally in the direct operation of the facility although the franchisor recommends that they do so. If the franchisor does not personally manage the facility, they must hire a management company or individual manager with significant training and experience in general management of similar lodging facilities to manage the facility. The manager must successfully complete the franchisor’s training program. The franchisor does not restrict the type of goods and services that are offered at the facility but the franchisee must offer accommodations that comply with system standards and applicable law.
Total Number of Units: The total number of franchised for year ended 2008: 380
|Name of Fee||Low||High|
|Application Fee, Initial Fee||$36,000||$36,000|
|Furniture, Fixtures and Equipment||$100,000||$150,000|
|Opening Inventory and Supplies||$6,000||$25,000|
|Grand Opening Advertising||$20,000||$31,600|
|Miscellaneous Non-tangible Asset Costs||$25,000||$45,000|
|Additional Funds for 3 Month Initial Period||$51,000||$61,000|
|Total Estimated Initial Investment||$383,024||$679,998|
|Total Cost per Room||$3,830||$6,800|
|Name of fee||Amount|
|Royalty||4.5% of Gross Room Revenues.|
|System Assessment Fee||Includes a Marketing Contribution of 2% of Gross Room Revenues, a Daily Guest Room Charge of 100 per room per day for the first 100 rooms at the Facility and 5 cent per room per day for each additional guest room, and a Basic Reservation Fee of 2% of Gross Room Revenues.|
|Loyalty Program Charge||Up to 5% of Gross Room Revenues accrued by a loyalty program member.|
|Taxes||Amount assessed by federal, state and local tax authorities on Royalties and System Assessment Fees|
|Interest||Lesser of 1.5% per month or the maximum rate permitted by law on the unpaid amount|
|Extension Fee||$2.00 per room per month|
|Training Fees and Expenses||Tuition is currently $1,250 for the general manager to attend general manager orientation and $825 for the franchisee to attend owner orientation. Tuition for the franchisee’s initial training is subject to increase if the franchisee or the general manager does not attend a program by the deadline under the Franchise Agreement. The franchisee must pay the tuition then in effect for subsequent training sessions for replacement personnel.|
|Public Offering Fee||$15,000|
|Liquidated Damages||Liquidated damages will be equal to the greater of $2,000 per guest room or total Royalties and System Assessment Fees for 24 months. For pre-opening default, reduced to one-half of formula amount, payable 10 days after termination notice is sent|
|Condemnation Payments||Recurring Fees for one year after notice of condemnation|
|Agency Commissions; International Sales Office Commissions; Member Benefits Commissions||Up to 15% of Gross Room Revenues generated by Agency reservation; 15% of Gross Room Revenues generated from bookings from an International Sales Office's territory (includes Agency Commission), excluding voucher sales; 10% of Gross Room Revenues booked under Member Benefits program|
|Service Charge||0.5% of commissionable revenue booked by Agencies or International Sales Offices|
|Property to Property Incentive Sales Commissions||10% of Gross Room Revenues|
|Service Charge||Service Charge - .75% of commissionable revenue (0.5% for departures beginning 9/15/06)|
|GDS and Internet Fees||$5.35 per reservation booked through the global distribution systems ("GDS"), $4.35 per reservation booked through a third party Internet site (not booked through a GDS), plus agency commissions if applicable. No fees will be charged for bookings through the franchisor’s website or the Wyndham Rewards website.|
|Chain Conference Fee||$895 in 2007.|
|Rooms Addition Fee||Now $350 for each guest room added to Facility|
|Relicense Fee||Same as Initial Fee|
|Indemnification Costs||Cost of defending and resolving indemnified claims. Includes "Returned Check Fee" (currently $20) for checks the franchisee submits to the franchisor which are dishonored by the franchisee bank or other financial institution.|
|Audit Fee||$1,000 subject to increase on a Chainwide basis to cover the franchisor costs, which will not be more than 5% per year on a cumulative basis.|
|Courtesy Lodging||Employee rate for the franchisor’s representatives on business|
|Dispute Resolution Costs||Costs, expenses, reasonable attorneys' fees|
|Re-inspection Fee and Costs||Currently $ 1,000 for the first re-inspection and $ 1,500 for the second and any subsequent re-inspection|
|Guest Services Assessments; Processing Fee||$100.00 Guest Services Assessment plus resolution costs if the franchisee does not respond to and resolve a guest's complaint and the guest continues to contact the franchisor; $60.00 Processing Fee per complaint in excess of the Annual Facility Allotment|
|PMS Maintenance, Support and Service Fee||$34.65 - $50 per room per year, depending on the PMS system the franchisee purchases, plus up to $ 1,100 per year for each interface, depending on the PMS System.|
|Fee for Broadband Internet Access Service||$150 to $160 per month for 36 month term.|
|Guaranteed Best Available Rate Processing Fee||$60 plus the franchisee must match the lower Internet rate less 10%.|
|Service Interruption Fee||$200; $500 if the franchisor must re-activate the franchisee’s service three or more times in any 12 month period|
|ResCentral Call Handling Fee||$1.65 per transferred call with $50 minimum per month.|
Date of FDD: 2009
The above information has been taken from the UFOC/FDD of Travelodge.
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