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InterContinental Hotels & Resorts Franchise Costs, Fees & FDD

Year Business Began: 1946

Franchising Since: 1956

U.S. Headquarters: Atlanta, Georgia

Country of Origin: England

Estimated Number of Units: 225 (6,600 est. across all InterContinental Hotels Group brands)

Franchise Description: The franchisor is Holiday Hospitality Franchising, LLC (HHFL). HHFL’s ultimate corporate parent is InterContinental Hotels Group PLC. The franchisor offers and grants franchises under the terms of a License Agreement. The license provides for the establishment and operation of an InterContinental Hotel or an InterContinental Resort. InterContinental Hotels are typically located in major markets, important secondary cities and resort destinations. InterContinental Hotels and InterContinental Resorts are full service facilities targeted to luxury business, conference and leisure travelers. Other brands under the InterContinental umbrella include Atwell Suites, Avid Hotels, Candlewood Suites, Crowne Plaza Hotels and Resorts, Even Hotels, Garner, Holiday Inn Hotels and Resorts, Holiday Inn Express, Holiday Inn Club Vacations, Hotel Indigo, HuaLuxe Hotels and Resorts, Iberostar Beachfront Resorts, Klimpton Hotels & Restaurants, Regent Hotels & Resorts, Six Senses Resorts, Residences and Spas, Staybridge Suites, Vignette Collection, and Voco Hotels.

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Training Overview: The franchisor does not assist in the hiring of employees, but it will train certain hotel employees either at the franchisee’s hotel, at its headquarters in Atlanta, Georgia, or at various other major metropolitan locations which it may designate. Franchisees must pay any travel and living expenses of their trainees, and the franchisor may charge franchisees a fee to attend training workshops. Every general manager must satisfactorily complete the IHG® General Manager Program Onboarding Level within the dates required per the franchisor’s standards. HHFL also recommends that the General Manager obtains the Certified Hotel Administrator (CHA) designation from the American Hotel & Lodging Educational Institute (AHLEI). The persons holding certain positions in the hotel including, directors of sales, sales managers, front office managers, executive housekeepers, directors of engineering, and food and beverage directors or managers must also satisfactorily complete the appropriate training and/or certification at HHFL’s corporate office or another location that HHFL designates, within the date limits specified in the franchisor’s standards of assuming their respective positions. The franchisor’s employees will provide on-site consulting and/or training visit(s) to the hotel each year.

Territory Granted: The franchisor does not typically grant franchises for exclusive areas or territories. The license will be for a specific site only and for the licensing of one hotel. The license applies to the location specified in the license and to no other location. Franchisees will not receive an exclusive territory. Franchisees may face competition from other licensees, from hotels that the franchisor or its affiliates own, or from other channels of distribution or competitive brands that the franchisor or its affiliates control. In special circumstances, when in the franchisor’s sole judgment, special considerations warrant, HHFL may grant exclusive or protected areas in which another InterContinental Hotel will not be licensed; however, in such cases the license would still be for a specific site only and for the licensing of one hotel only.

Obligations and Restrictions: Whether franchisees are an individual, corporation, partnership or other entity, the franchisor requires them to retain and exercise direct management control over the hotel's business at all times unless otherwise approved by the franchisor. However, the franchisor does not require that franchisees participate personally in the direct operation of the hotel. The franchisor may include conditions in the license requiring franchisees to hire a duly qualified and experienced (i) management company acceptable to HHFL or (ii) general manager, director of food & beverage or director of sales with at least two years prior experience in such position at a hotel operated under any of HHFL’s brands or at a hotel in a similar brand segment as the hotel, as defined by Smith Travel Research, Inc. The franchisor requires franchisees with management experience who will supervise the hotel on the premises or hire a management company it approves. A general manager who has successfully completed the franchisor’s training program must directly supervise the business on the premises. Franchisees must provide the hotel services described in the license and must ensure that no part of the hotel or the system is used to facilitate or promote a competing business. There are no restrictions as to the customers to whom franchisees may sell guest rooms or other goods or services that are related to the hotel business.

Term of Agreement and Renewal: The length of the initial franchise term is 20 years from the date the hotel opens in the system for a new development; 10 years from the date the hotel opens in the system for a conversion; and 10 years from the term commencement date for a change of ownership or re-licensing. The license does not provide for renewal or term extensions. If the franchisor agrees to re-license, franchisees may be asked to sign a contract with materially different terms and conditions than the original contract.

Financial Assistance: The franchisor does not offer any formal program for direct or indirect financing. HHFL, SCH or its affiliate, General Innkeeping Acceptance Corporation (GIAC), may furnish loans or guaranties. HHFL, SCH and GIAC consider making loans or guaranties under terms and conditions that would be negotiated on a case by case basis with the prospective franchisee and any decision to make a loan or provide a guaranty would be made in the judgment of HHFL, SCH or GIAC alone, and conditioned upon approval of the Executive Committee and Board of Directors. It is the franchisee’s responsibility alone to obtain adequate financing for all expenses related to the development, opening and operation of the hotel.

Estimated Initial Investment
300-room InterContinental Hotel or InterContinental Resort
Name of FeeLowHigh
Application Fee$150,000$150,000
Property Improvement Plan (PIP) Fee$0$12,000
LandVaries
Building Construction$83,698,200$113,238,230
Furniture, Fixtures & Equipment$13,735,800$22,894,407
Financing and ClosingVaries
Operating Supplies & Equipment$3,423,000$4,936,950
Primary Identification Sign (including installation, freight, foundation and wiring)$51,800$181,125
PMS Equipment; Software; Installation & Training; IHG Concerto™ Equipment & Training; NGP Equipment; Software; Installation & Training$126,000$158,000
Guest Internet Access – Hardware (IHG Connect)$105,000$105,000
Guest Internet Access Connect Bandwidth Fiber Construction$500$2,500
Telephone Switch$82,500$82,500
CCTV Security$22,500$37,500
Audio Visual & Music System$25,000$25,000
NextGen Payments$350$800
Public Access Computers$5,400$7,700
Key Card System$11,000$27,500
Digital/Wayfinding Signage$20,000$90,000
In Room Entertainment – Hardware, Maintenance, Guest Support & Content$15,000$30,000
Employee Safety Devices$38,000$45,000
Market Feasibility Study$0$50,000
InterContinental Design & Concept Development Support Fee$75,000$150,000
InterContinental Restaurant & Bar Concept Development$75,000$150,000
Restaurant & Bar Brand Identity Services (per branded venue)$25,000$50,000
Openings and Renovations Preopening Support Fee (to be invoiced within 60 days of license execution by HHFL)$20,000$35,000
New Hotel Opening Training Materials$0$5,000
IHG University (annual subscription; prorated based on opening month)$6,000$6,000
Pre-Opening Training (plus trainer expenses)$7,500$7,500
Back of House Program$550$10,000
Opening Date Extension Fee (plus trainer expenses)$0$5,000
License and PermitsVaries
Professional Fees$3,785,000$7,131,150
Security Deposits$10,000$50,000
Insurance$220,000$687,500
Hotel Photography$45,000$80,000
Additional Funds and Prepaid Expenses During the Initial Phase (first 3 months after opening)$1,000,000$2,625,000
ESTIMATED TOTAL (These estimates do not include real estate related costs or other items that HHFL cannot estimate.)$106,798,100$153,088,452
 
Other Fees
Type of FeeAmount
Royalty Fees
Royalty6% of gross rooms revenue (GRR) plus 2% of gross food and beverage sales.
Royalty In Case of Casualty2% of GRR based on average GRR for preceding 12 months.
Sales and Marketing Fees
Services Contribution2% of GRR based on average GRR for preceding 12 months.
Initial Marketing Contribution for the Loyalty Program$10.00 per approved guest room.
Loyalty Program Contribution4.55% of qualifying full folio revenue from frequency program members.

1.365% of qualifying room and meeting revenue from frequency program members.
Local Marketing ProgramsVaries depending on actual cost.
Promotions; Required and Optional Advertising MaterialsExpenses incurred.
Capital ReserveUp to 5% of gross revenue.
Third Party Distribution Connection Fees
IHG Commission Services (ICS) (Travel Agent Commissions)10% (minimum) commission on total room rate.
IHG Ignite Digital Marketing Fees2.25% commission on all consumed direct digital revenue booked.
TMC Revenue ProgramHotels pay an override fee of 2.25% on qualifying consumed room nights only, with a maximum annual payment of $20,000 USD (or equivalent local currency). For select hotels participating in the IHG Luxury & Lifestyle program, the maximum annual payment is $25,000 USD.
IHG Business Edge Program Booking Fees4% of consumed transient revenue booked through the IHG Business Edge Program.
Groups & Meetings Fee4% of consumed or agreed room revenue for leads sent to hotels via IHG MeetingBroker.
Groups & Meetings TMC Fee2% globally for BCD M&E, CWT M&E and AMEX GBT. G&M TMC Revenue Programs are pay-for-performance marketing programs designed by SCH.
Technology Fees
Technology Services Fee$17.40 per room, per month.
PMS Software MaintenanceVaries. Maintenance and/or hosting fees may be increased up to 5% per year. Costs will vary according to the franchisee’s technology needs.
Property Management Fees: Opera – Premise BasedVaries.
FastConnect SD-WAN and Access Control Manager$168 – $300 for 6 devices and 10 users; plus $22.00 per additional device and $1.25 per additional user.
NextGen Payments Program Fee (includes support, installation and hardware)$280 - $800 (exact amount will be defined on hotel quote).
Guest Internet Access – Bandwidth Service Subscription (IHG Connect)$500 to $2,500. Pricing is estimated and varies based on vendor and circuit size selected.
Guest Internet Access – Hardware Maintenance & Guest Support (IHG Connect)$1.50 per guest room;

$25.00 per meeting/conference room, plus $20.00 per 2000 sq. ft. of total meeting space, maximum of $500.00 (meeting room support fees only apply if total meeting space exceeds 2000 sq. ft.).

$1,452 is the estimated cost of four access points per 100 guest conference space capacity (one-time charge).

SCH approved GIA hardware would need to be purchased from and installed by an SCH approved integrator.
Guest In-Room Entertainment – Hardware, Maintenance, Guest Support, & Content$3.75 per room, per month for software, maintenance, and $1.00 per room, per month guest support. $7.20 per room, per month for content. $1.25 per room, per month for HBO (where required). $1.00 per room, per month for non-recurring maintenance and support fees.
Employee Safety DevicesInitial fee of $125-$150 per room in the first year of installation plus $20.00 to $25.00 per room, per year for software and maintenance support.
Security Software for Public Access Computers (Business Centers)$7,865 to $10,565 for three workstations and one printer.
SMS Guest MessagingVaries.
HotSOS or Similar MaintenanceAfter initial set-up cost, $4,000 to $15,000/year depending on components and number of mobile devices.
F&B POS Support$45.00 per workstation per month.
Revenue Management System: IHG Concerto, Yielding & Price Optimization; or Revenue Analytics’ N2 PricingCosts of between $30 and $120 per month may apply for competitive rate insight shopping. For hotels currently subscribing to a RevenueStrategy360 or Rate360, these costs may be waived.
Miscellaneous
Tax on Sales/Gross ReceiptsHHFL’s actual cost.
Standard Fee for Room Additions$500 for each new approved guest room or suite.
Public Offering or Private Placement Processing Fee$25,000 plus additional costs incurred by the franchisor.
Audit/InterestAmount of deficiency, interest and $3,000 (audit fee may be increased on brand system-wide basis).
Re-licensing Fee or Change of Ownership Application Fee$500 per guest room but not less than $100,000.
Realignment/Name Change; Brand Conversion Processing Fee$5,000 for licensee name change, ownership realignment or brand conversion.
IndemnificationVaries.
Liquidated Damages Payment on Premature Termination Before HHFL Authorizes Franchisees to use The System at the Hotel (includes termination resulting from failure to perform the construction, upgrading and renovation work described in the license)A lump sum equal to the monthly average of all amounts that would have been payable to HHFL under the license assuming the hotel had collected GRR based on the average daily revenue per available room for all “mature hotels” in the system in the United States for the previous twelve months, multiplied by the greater of (a) 6 or (b) the number of full and partial months from the term commencement date to the termination date of the license.
Liquidated Damages Payment on Premature Termination After HHFL Authorizes Franchisees to Use the System at the Hotel (applicable only if License terminates before expiration, in accordance with License Agreement)An amount equal to the total amounts required during the 60 calendar months of operation preceding the termination or during the preceding number of months equal to the unexpired license term at the time of termination (if less than 60 months); or if the hotel has not been in operation in the system for 60 months, an amount equal to the greater of (i) 60 times the monthly average of these amounts for the period during which the hotel has been in operation in the system, or (ii) 60 times these amounts as are due for the one month preceding the termination.
Comfort Letter Processing Fee$2,500 for the preparation and processing of any mezzanine, replacement or subsequent comfort letters after the initial senior lender letter.
For rest of other fees chart, including fees for extensions of construction commencement, operations fees, and pre-opening and consultation fees, please see FDD.
The above information has been compiled from the FDD of InterContinental Hotels & Resorts. Year of FDD: 2025.
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