INTERCONTINENTAL HOTELS GROUP Franchise Cost and Profit Margin – Review
You might be bothered about how much is an InterContinental Hotels and Resorts franchise? And not only that, there could so many questions that you need to get answers to before making the decision to become a franchisee with the company.
Buying into an IHG franchise also come with its own risk, but if you are able to world along with the franchise model of the company, then there is a great chance of success.
ABOUT THE COMPANY (IHG FRANCHISE)
InterContinental Hotels and Resorts as established in the year 1952 and it was started outside out of the country a a subsidiary of the Pan American Airlines. The company was later sold in the year 1980. In the year 1988, a brewery based in the UK bought Holiday Inn International.
The hotel brands under the company are Crowne Plaza & Hotels, Candlewood Suites, Hotel Indigo, Staybridge Suites, Intercontinental Hotel & Suites, Holiday Inn Express and Even Hotels.
IS INTERCONTINENTAL HOTELS AND RESORTS A FRANCHISE?
The InterContinental Hotels and Resorts is a franchise and they began selling franchise opportunities in the year 1954 giving them about 64 year of franchising experience. Their franchises span across 6 different continents and there are numerous franchise opportunities available to the public.
THE FRANCHISE OFFER
When you buy into the company’s franchise, you will be granted the opportunity to carry out the business and services of the InterContinental Hotels and Resorts franchise under the terms of an agreement signed in the FDD.
HOW MUCH DOES AN INTERCONTINENTAL HOTELS AND RESORTS FRANCHISE COST?
The InterContinental Hotels and Resorts franchise cost is the summation of all the investments required to establish a franchise unit with the hotel chain. The initial investment that is required to establish a franchise unit is about $7,000,000 to about $100,000,000. The chain also requires every new franchisee to have liquid cash to the tune of about $50,000,000 and then a working capital of about $30,000,000
INTERCONTINENTAL HOTELS AND RESORTS FRANCHISE FEE
Buying into an InterContinental Hotels and Resorts franchise will require that you make an initial franchise fee payment. This will give you the license to operate under any of the brands that is being managed by the hotel chain. The initial franchise fee is non-refundable and can be renewed after a certain period of time as agreed in the FDD. The initial franchise fee payment is between $50,000 and $70,000 depending on the particular franchise you are buying. New franchisees will also be expected to make an additional on-going royalty fee of about 5-6% of the monthly gross revenue of the franchise.
HOW MUCH DOES AN INTERCONTINENTAL HOTELS AND RESORTS FRANCHISE MAKE?
The average income that can be realized by an InterContinental Hotels and Resorts franchise owner will depend on so many factors. One of which is the location of the franchise unit. The hotel chain, however, has a working franchise model, if well applied by the franchise owner will guarantee the success of the business.
InterContinental Hotels and Resorts franchise will not offer direct assistance to franchisees in hiring their staff. But franchisees will have the opportunity to get trained by the head office. Every major employee of the franchise unit is mandated to undergo training as designed by the Headquarters within 180 days of assuming the position they occupy.
The company does not guarantee any exclusive territory to franchisees. The license purchased will be valid for only a specific location and also for just a single Hotel. The license cannot be utilized to open another location, except for the one agreed upon. Franchisees are also likely to face competition from other franchises that are being managed by the parent company.
InterContinental Hotels and Resorts franchise doesnot offer any form of direct financing to franchisees. Franchisees that seek additional funding for their business may need to contact any 3rd party affiliate of the company that offers funding to start up the business.
TERMS OF AGREEMENT
The period at which a franchisee can hold the license to operate under the company’s identity is 20 years from the period the franchise agreement is signed. The license does not guarantee an automatic renewal or extension at the expiration of the agreed term. However if the company agrees to renew the license, franchisees may be required to sign a different contract form what they originally signed at the beginning of the business.
OTHER SUPPORTS AVAILABLE
Apart from the initial training that will be given to key employees of the franchise unit at the beginning of the business, the company also offers continual support to every new franchise. Supports will come in the areas of meetings, online supports, field operations, and security and safety procedures with access to a direct toll-free line.
HOW TO OPEN AN INTERCONTINENTAL HOTELS AND RESORTS FRANCHISE
The information contained in this article has discussed on how to open an InterContinental Hotels and Resorts franchise. However, to submit your application, you will need to proceed to the company’s website.
Once your application is received and you are considered eligible for a franchise opportunity, the company will assign a franchise manager to you. The responsibility of the manager will be to assist you in setting up the new franchise unit.