Hotel Franchise Fee Stack Calculator

Hotel franchise fees stack across royalty, marketing, reservation, and loyalty — compute all-in.

Gross room revenue

Royalty fee %

Marketing fee %

Reservation fee %

Loyalty fee %

Annual PIP reserve

Total franchise cost

$1,650,000

As % of room revenue

0.17%

Fee stack only (excl PIP)

$1,450,000

How the math works

Fee stack = revenue × sum of franchise %. Total includes PIP reserve.

$10M × 14.5% = $1.45M fees + $200k PIP = $1.65M total = 16.5% of revenue.

How to Use

Enter gross room revenue.
Enter royalty fee %.
Enter marketing fee %.
Enter reservation fee %.
Enter loyalty program fee %.
Enter property improvement assessment.
Read all-in franchise cost.

Frequently Asked Questions

Franchise fee components?

Royalty: 4-6% of room revenue (Marriott, Hilton, IHG). Marketing: 2-4% of room revenue. Reservation/CRS: 2-3% of room revenue + per-transaction fees ($5-15 per reservation booked through brand channels). Loyalty program: 3-5% of revenue from loyalty members. Technology: 0.5-2% of revenue. Total: 11-18% of room revenue typical. On $10M room revenue: $1.1-1.8M franchise fees.

Brand selection trade-off?

High-end brand (Marriott, Hilton, Hyatt): higher fees (14-18%) but premium ADR (10-30% above competitive set) + strong loyalty member bookings (30-50% of revenue). Mid-tier (Best Western, Choice, Wyndham): lower fees (9-13%) but less ADR premium (3-10%). Unbranded/independent: no fees but no loyalty member flow, harder competitive position, 10-20% ADR discount typical. Net economics often favor branding in stabilized markets.

PIP and brand standards?

Property Improvement Plan (PIP): required capex when renewing franchise or changing brands. Typical PIP: $15-40k per key every 7-10 years. $150-400k for a 100-room hotel. Brand enforces standards (signage, design, technology) via regular inspections. Non-compliance: fines, brand termination. Branded hotels: more capital-intensive but protected brand equity.

When does franchise not pencil?

Small markets (<100 rooms demand): brand fees don't pay for themselves. Budget segments in high-cost markets. Unique/boutique positioning: brand dilutes identity. Legacy portfolios with strong local brand. Some operators prefer soft-brand affiliations (Ascend, Tribute, Curio) — brand loyalty + flexibility. Independent operators with strong OTA mastery: 85-90% of branded revenue without fee burden.