Franchise Fee Load Calculator

Franchise fees burden hotel P&L vs independent operation.

Hotel revenue

Royalty %

Marketing %

Reservation %

Loyalty %

Total franchise fees

$2,439,000

Total fee load %

0.14%

Royalty amount

$990,000

How the math works

Total fees = revenue × (royalty + marketing + reservation + loyalty).

$18M × (5.5% + 2.5% + 1.8% + 3.75%) = $18M × 13.55% = $2.44M total franchise fees.

How to Use

Enter hotel revenue.
Enter royalty fee %.
Enter marketing/distribution fee %.
Enter reservation fee %.
Enter loyalty program fee %.
Read total franchise load.

Frequently Asked Questions

Typical fee structures?

Royalty: 4-6% of rooms revenue. Marketing/ad: 2-4%. Reservation/distribution: 1-3%. Loyalty: 3-5%. Total: 10-17% of rooms revenue. Total fee load considerable vs independent.

Major chains?

Marriott: 5-6% royalty + 1.5-2% marketing + 1.2% distribution + 3.75-4% loyalty. Hilton: similar. Hyatt: competitive. Premium brand (Ritz-Carlton, W): 2-3% higher. Economy brands: lower total.

Economics?

Franchise premium: 15-25% ADR vs independent. Lower-cost distribution (OTA, direct, loyalty). Faster ramp-up. Versus independent: 10-15% more revenue but 12-17% fees = net 0 to +10% P&L benefit. Most revenue gain absorbed by fees.

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.