Wyndham Resort Franchise in 2024: Costs, Fee & FDD
Looking to invest in the global hospitality giant Wyndham Hotels & Resorts? Learn about the franchise costs, fees, and support system that make this brand a top choice for hotel investors. Discover everything you need to know to get started!
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Wyndham Hotels & Resorts is a global hospitality powerhouse known for its wide-reaching presence and iconic portfolio of brands. Founded in 1981, Wyndham began with a single hotel and has grown into one of the largest and most successful hotel companies in the world. The company is led by a mission to make hotel travel accessible for everyone, focusing not just on guest satisfaction but also on supporting its hotel owners worldwide. With an expansive network of brands and a commitment to providing rewarding experiences for both guests and owners, Wyndham stands as a leader in the hospitality industry.
The core products and services of Wyndham Hotels & Resorts include a diverse range of hotel brands that cater to various demographics and travel preferences. With 25 brands, including well-known names like Days Inn, Super 8, Ramada, and Wyndham Grand, the company provides comfortable accommodations and modern amenities designed for both leisure and business travelers. The company also offers ancillary services such as its industry-leading Wyndham Rewards® program, which allows guests to earn and redeem points for stays and other rewards. This loyalty program has become a significant draw for frequent travelers, with over 110 million members globally.
Wyndham’s scale is truly impressive. With more than 9,200 hotels spread across 95 countries, Wyndham serves millions of customers daily, making it one of the largest hotel chains in the world. The brand’s extensive reach ensures a significant presence in key travel markets worldwide. Additionally, Wyndham Rewards has been a major contributor to the company’s success, with program members accounting for approximately 50% of U.S. hotel stays. This global network of loyal customers helps drive consistent business to Wyndham’s franchise owners.
For franchisees, Wyndham offers a robust support system and training programs designed to ensure success. New hotel owners benefit from comprehensive resources, including site selection assistance, design and construction support, and marketing tools. Additionally, Wyndham’s strong operational support, coupled with its well-established brand recognition, makes it an attractive choice for investors. Franchisees also have access to the exclusive Titanium membership level of Wyndham Rewards, which provides them with elite benefits and further strengthens their position within the brand’s ecosystem. With a focus on rewarding development and growth, Wyndham Hotels & Resorts offers a compelling opportunity for potential hotel owners.
Wyndham Hotels Franchise Insights
- Wyndham operates over 9,200 hotels in 95 countries, making it one of the largest and most diverse hotel chains in the world, ensuring significant market reach and growth potential for franchisees.
- The Wyndham Rewards® program is a game-changer, with over 110 million members, contributing to approximately 50% of U.S. hotel stays, creating a built-in customer base that can drive business directly to your hotel.
- Wyndham offers 25 hotel brands ranging from budget-friendly options like Super 8 to upscale brands like Wyndham Grand, ensuring that franchisees can target a wide variety of customer segments and tailor their investment to different markets.
- Franchisees gain access to the Titanium level of Wyndham Rewards, an exclusive membership that offers elite benefits and further drives customer loyalty, increasing franchisee earnings potential.
- Wyndham Rewards members help generate significant business, with franchisees benefiting from the program’s cross-selling power, which drives customers from Wyndham’s global network of hotels to individual locations.
Wyndham Hotels Franchise Key indicators
Growth YOY (%)
3%
vs industry 2%
Total U.S. Franchised Units
47
3-Year Failure Rate
10%
vs industry 7%
How much does it cost to open a Wyndham Hotels franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Wyndham Hotels franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Wyndham Hotels franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). you can see a breakdown of the costs to open a Wyndham Hotels below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Fee (inclusive of Application Fee) | $150,500 | $150,500 |
| Photos | $3,560 | $9,860 |
| Training Tuition | $6,250 | $6,250 |
| Training Expenses | $1,200 | $2,950 |
| Market Study | $12,000 | $50,000 |
| Real Estate and Site Preparation | Varies | Varies |
| Architecture, Design and Engineering, Phase I Environmental, Permits, Licenses, Deposits, and Related Fees | $1,569,715 | $5,871,240 |
| Facility Construction | $41,210,033 | $73,456,020 |
| Construction Contingency | $2,060,502 | $3,672,801 |
| Technology Systems | $199,047 | $201,047 |
| Property Management Set-Up and Installation | $18,825 | $28,425 |
| Furniture, Fixture, and Equipment | $3,725,459 | $3,947,939 |
| Signage | $35,000 | $150,000 |
| Opening Inventory | $1,012,261 | $1,073,860 |
| Insurance | $35,000 | $55,000 |
| Grand Opening Advertising | $50,000 | $450,000 |
| Liquor License | $1,500 | $450,000 |
| Pre-Opening Wages | $681,886 | $2,149,691 |
| Miscellaneous Non-Tangible Asset Costs | $52,780 | $79,037 |
| Additional Funds for 3 Month Initial Period | $904,652 | $2,372,457 |
| Total Cost per Room | $171,861 | $312,881 |
| Total Estimated Initial Investment | $51,730,170 | $94,177,077 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
Wyndham Hotels & Resorts offers franchise opportunities in a high-investment segment of the hospitality industry. The required capital to open a Wyndham hotel or a similar franchise in the industry varies significantly depending on the type of property and its location. Below is an overview of the general financial requirements, including estimates based on the industry standards for large hotel investments.
- Initial Investment The total investment to open a Wyndham hotel, particularly for a 301-room new construction facility, ranges from $51.7 million to $94.2 million. This figure includes costs for property acquisition, construction, furniture, fixtures, equipment, and other startup expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets While exact liquid asset requirements are not typically disclosed, hotel franchises in this segment often require liquid assets in the range of $1 million to $5 million. This ensures that the franchisee has the ability to manage day-to-day operations and unforeseen expenses.
- Net Worth Hotel franchises like Wyndham generally expect a net worth of at least $10 million to $20 million for a multi-million-dollar investment. This requirement is designed to ensure the franchisee has sufficient financial strength to support the long-term success of the business.
How much does a Wyndham Hotels franchise owner make?
Calculating the salary of a Wyndham Hotels franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Wyndham Hotels franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Wyndham Hotels Revenue & Gross Sales
The annual median gross sales for Wyndham Hotels & Resorts are not publicly available. However, the recent median gross room revenue per available room (RevPAR) was $76.70, highlighting the brand’s strong revenue generation across its global network.
Which key factors impact the average revenue performance of Wyndham Hotels franchisees?
Several factors likely contribute to the performance of U.S. franchisee median gross sales for Wyndham Hotels & Resorts. The brand’s extensive presence in key markets, including both urban and leisure destinations, helps attract a diverse range of travelers, from business guests to tourists. Wyndham’s strong loyalty program, Wyndham Rewards, plays a significant role in driving repeat business, fostering customer retention, and generating consistent demand. Additionally, the brand’s ability to offer a broad portfolio of hotels across various price points allows franchisees to tap into multiple market segments, catering to different customer needs. Operational support, including marketing tools, revenue management, and brand recognition, further enhances franchisee performance, helping them achieve stable and competitive sales within the hospitality industry.
Wyndham Hotels Franchise Operational Costs
When considering opening a Wyndham Hotels & Resorts franchise, it’s important to account for several primary ongoing operational costs. These costs are necessary to maintain smooth day-to-day operations, ensure quality guest experiences, and sustain the property’s profitability. Below are the key operational expenses you’ll need to manage:
- Staffing and Payroll Labor costs, including salaries, wages, and benefits for hotel staff, are one of the largest ongoing expenses. This includes front desk personnel, housekeeping, maintenance, and management teams.
- Utilities and Maintenance Regular expenses for utilities (electricity, water, gas) as well as the upkeep of the property, including repairs, cleaning supplies, and preventative maintenance, are essential to keep the hotel running efficiently.
- Property Management Systems and Technology Investment in advanced technology for reservations, guest services, and property management systems (PMS) is crucial to streamline operations and enhance guest satisfaction.
- Insurance Comprehensive insurance policies, including property, liability, and workers’ compensation, are vital for protecting the hotel and its assets against unforeseen events and risks.
- Inventory and Supplies Ongoing costs for guest amenities, linens, toiletries, food and beverage offerings, and other supplies required to maintain hotel operations at a high standard.
Understanding and effectively managing these costs is essential for ensuring that your Wyndham hotel runs smoothly, stays competitive, and remains profitable.
Wyndham Hotels Franchise Fees
When considering the financial structure of a Wyndham Hotels & Resorts franchise, it’s crucial to factor in the ongoing fees that contribute to the brand’s broad support system and market presence. Below are the primary fees you should expect:
- Royalty Fee Wyndham charges a royalty fee of 5% of gross room revenues. This fee supports the continued use of the Wyndham brand, access to corporate resources, and operational assistance that helps drive franchisee success.
- Marketing and Global Sales Fee Franchisees are also required to pay a 3% fee on gross room revenues. This fee funds Wyndham’s marketing initiatives, including digital and traditional advertising, and global sales efforts designed to drive bookings and increase brand visibility across various markets.
- Additional Fees There are other fees associated with training programs, technology services, and various resources provided by Wyndham.
These fees are vital in supporting the brand’s extensive network and ensuring that franchisees are equipped with the tools and expertise needed to succeed in the competitive hotel industry.
Wyndham Hotels Franchise Earnings
While specific earnings data for Wyndham Hotels & Resorts franchises is not available, we can provide an informed overview based on industry standards and franchise characteristics. The potential earnings for hotel franchises generally depend on various factors, including location, property size, and overall market demand. Wyndham Hotels, with its extensive portfolio and global brand recognition, offers franchisees a chance to benefit from a well-established network and loyal customer base. Franchisees can potentially see steady revenue growth driven by high occupancy rates, especially when the property is located in high-traffic tourist or business hubs.
Franchise profitability can also be influenced by effective operational management, including cost control, staffing, and maximizing revenue per available room (RevPAR). Wyndham’s robust marketing and loyalty programs, such as Wyndham Rewards, contribute to increasing repeat business and attracting new guests, which further supports franchisee earnings. Additionally, the brand’s ongoing support, technology resources, and operational systems help streamline costs and improve guest satisfaction, all of which are key to long-term profitability.
How to Open a Wyndham Hotels Franchise
Becoming a Wyndham Hotels & Resorts franchisee involves a structured process designed to ensure both the franchisee and the brand are aligned in goals and expectations. This process typically begins with an inquiry and ends with the launch of operations, ensuring that franchisees are fully supported and ready for success. Below are the steps involved:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Application & Preliminary Approval If you decide to move forward, you’ll submit an application. This involves providing detailed personal and financial information to help Wyndham assess your suitability as a franchisee. Preliminary approval is granted based on your background, financial standing, and the alignment of your goals with the Wyndham brand.
- Franchise Agreement & Final Approval After reviewing the FDD, you’ll sign the franchise agreement and proceed to finalize the financial arrangements. This is the official commitment to becoming a Wyndham franchisee, and you’ll receive final approval from the brand to proceed.
- Site Selection & Development If you are opening a new facility, Wyndham will assist you in selecting an ideal site for the hotel. They’ll provide guidance on factors such as location, market potential, and site feasibility. For conversions, the property must meet Wyndham’s standards. Construction or renovation begins once a site is secured.
- Training & Pre-Opening Support Prior to opening, Wyndham offers extensive training programs for both you and your management team. Training typically includes hotel operations, marketing strategies, customer service, and using the brand’s systems. Pre-opening support also includes assistance with hiring and setting up the property.
- Launch & Start of Operations After completing the necessary preparations, including training, staffing, and setting up the property, your Wyndham hotel will officially open for business. The brand will continue to offer ongoing support as you begin operations to ensure you’re able to meet guest expectations and achieve long-term success.
Pros & Cons
Pros
Strong Brand Recognition: Wyndham is one of the largest and most recognizable hotel brands globally, with a vast network of hotels and loyal customers. This established reputation can lead to increased occupancy and revenue potential.
Global Reach & Market Presence: With over 9,200 hotels in 95 countries, Wyndham offers a broad market footprint, meaning you have access to a diverse customer base and the ability to leverage global and regional demand trends.
Proven Revenue Model: The franchise system’s performance-driven metrics, such as high RevPAR (Revenue per Available Room), can translate to strong revenue potential for owners, particularly with the support of Wyndham’s marketing and sales teams.
Cons
High Initial Investment: Opening a Wyndham franchise, particularly for larger, new-construction hotels, involves a substantial financial commitment (with total investments ranging from tens of millions of dollars). The high startup cost may be prohibitive for some potential franchisees.
Intense Competition: The hospitality industry is highly competitive, with numerous established brands and independent hotels vying for market share. This competition can make it challenging to maintain high occupancy rates, especially in crowded markets.
Dependence on Economic Cycles: The performance of the hotel industry is closely tied to economic conditions, and franchisees may face fluctuations in demand due to economic downturns, travel restrictions, or local market changes.
Complex Management & Operations: Hotel management involves overseeing numerous aspects of the business, including staffing, operations, customer service, and maintenance. This can be a time-consuming and demanding responsibility, particularly for first-time franchisees in the hospitality industry.
