Brand Conversion Payback Calculator

Brand conversion costs recovered through revenue lift.

PIP cost

Revenue lift %

Current revenue

Franchise fees %

Payback months

136.4

Net annual lift

$440,000

Annual new revenue

$12,000,000

How the math works

Net annual lift = rev lift − franchise fees. Payback = PIP / net lift × 12.

$10M × 20% = $2M lift. $12M × 13% = $1.56M fees. Net $440k. $5M / $440k × 12 = 136 months = 11.3 yrs.

How to Use

Enter conversion cost (PIP).
Enter revenue lift %.
Enter current annual revenue.
Enter franchise fees %.
Read payback months.

Frequently Asked Questions

Typical conversion math?

Independent hotel doing $10M revenue. Marriott conversion costs $5M PIP. Rev lift 20% = +$2M. Franchise fees 13% of new revenue = -$1.56M. Net lift $440k. PIP payback 11-12 years. Break-even after year 5-6.

When to convert?

Small independent struggling: conversion often pays off despite high PIP. Large established independent: marginal benefit. Resort with strong brand identity: often better independent. Each case requires detailed underwriting.

Alternative brands?

Marriott, Hilton: largest systems, highest fees, biggest rev lift. Hyatt: mid-size, moderate. Kimpton, Curio, Autograph: soft brands preserving independent feel. Best Western: lowest fees, smallest system. Different risk/reward.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.