If you’re considering delving into the hospitality industry, franchising with a reputable brand like Marriott International could be a lucrative venture. However, before diving in, it’s essential to understand the costs, fees, and legal documents associated with such a partnership. In this guide, we’ll walk you through everything you need to know about Marriott International franchise costs, fees, and the Franchise Disclosure Document (FDD).
Year Business Began: 1967
Franchising Since: 1967
Headquarters: Bethesda, Maryland
Estimated Number of Units: 575 for the Marriott brand (8,290 across all Marriott International brands)
Franchise Description: Marriott International, Inc. is the franchisor. The franchisor is a worldwide operator and franchisor of hotels and related lodging facilities. Marriott hotels are full-service hotels that cater to business and leisure travelers. The hotels range in size from approximately 100 to 2,000 guestrooms. The hotels offer a variety of food and beverage options, including one or more restaurants and lounges, room service, catering, and banquet services. The franchisor’s brands cater to a broad spectrum of customers, and include luxury and upper-upscale full-service hotels, lifestyle hotels, extended-stay hotels, and select-service hotels. The company’s brands include: Bulgari, The Ritz-Carlton and The Ritz-Carlton Reserve, W, EDITION, JW Marriott, The Luxury Collection, Marriott Hotels, Westin, Le Méridien, Renaissance Hotels, Sheraton, Delta Hotels by Marriott, Marriott Executive Apartments, Marriott Vacation Club, Autograph Collection Hotels, Tribute Portfolio, Design Hotels, Gaylord Hotels, Courtyard, Four Points by Sheraton, SpringHill Suites, Fairfield Inn & Suites, Residence Inn, TownePlace Suites, AC Hotels by Marriott, Aloft, Element, Moxy Hotels, St. Regis Hotels & Resorts, Protea Hotels by Marriott, and StudioRes.
Training Overview: The franchisor requires that required personnel at a franchisee’s hotel complete the required training within a designated time period. All training must be completed to the franchisor’s satisfaction and verification of successful completion must be presented upon the franchisor’s request. Required training programs are in addition to initial pre-opening and opening training and support. The franchisor may require additional training programs and courses when systems and operating standards change. The franchisor uses a variety of instructional methods and materials in connection with its training programs, including digital training, interactive group sessions, self-paced modules, case studies, simulation activities, and video and audio training. A team determined by the franchisor will conduct on-site training before the hotel opens. The amount of on-site training time averages 14 days, but may last up to 21 days, and may include a post-opening hotel visit. During years in which the franchisor holds an educational general managers conference, the general manager of the hotel will be required to attend. The franchisor also has numerous leadership training programs that are held at different locations throughout the year and are available to franchisees on an optional basis.
Territory Granted: The Franchise Agreement will permit franchisees to operate one hotel of a specific size at a specific site selected by the franchisee and approved by the franchisor. Franchisees may not be granted a territory, but if they are, it will be non-exclusive. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, leases, manages, licenses, or franchises, or from other channels of distribution or competitive brands that the franchisor controls.
Obligations and Restrictions: The franchisor requires franchisees to operate the hotel or to hire a management company consented to by the franchisor. A general manager who has successfully completed the training program must directly supervise the business on the premises. The franchisor requires the general manager and other managers to devote full time to the management and operation of the hotel. Franchisees must offer all of the goods and services that the franchisor designates. Furthermore, franchisees may offer only those goods and services that the franchisor requires or specifically allows.
Term of Agreement and Renewal: The length of the initial franchise term is 20 years (term typically ends on the 20th anniversary of the opening date). The Franchise Agreement is not renewable.
Financial Assistance: Generally, the franchisor does not offer direct or indirect financing for franchised Marriott hotels or guarantee any financing, loans, or other obligations. However, from time to time, under very limited circumstances and at its sole discretion, the franchisor may offer for certain hotels credit support in the form of a contingent guaranty of a portion of a loan provided by a third-party lender, or it may make a mezzanine loan.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Application Fee | $120,000 | $120,000 |
| Pre-Opening Training, Revenue Management, Marketing Support, and Related Services | $114,000 | $181,000 |
| Property Management System, Reservation System, Yield Management System, Sales and Catering System | $217,000 | $287,000 |
| Other Systems and Training | $42,000 | $135,000 |
| Market Feasibility Study | $15,000 | $25,000 |
| Real Estate | Not determinable because of variables. | |
| Building Permit, Tap, and Impact Fees | Not determinable because of variables. | |
| Building Construction (per guestroom) | $249,800 | $416,300 |
| Kitchen and Laundry Equipment (per guestroom) | $6,300 | $8,100 |
| Furniture and Fixtures (per guestroom) | $30,700 | $39,200 |
| Technology Hardware & Software and Network Infrastructure (per guestroom) | $3,000 | $14,800 |
| Operating Supplies (per guestroom) | $6,700 | $8,600 |
| Additional Cost of Operating Supplies (per hotel) | $59,100 | $75,500 |
| Professional Design Services (per guestroom) | $12,500 | $20,800 |
| Insurance | Varies | |
| Start-Up Costs (per guestroom) | $4,800 | $7,500 |
| Hard Cost Contingency (10% of hard costs) | Not determinable because of variables. | |
| Food Safety and Sanitation Compliance (assuming 7 people at $70 per kitchen manager and engineering leader with responsibility for kitchen equipment) | $490 | $490 |
| Opening Advertising | $115,000 | $200,000 |
| Additional Funds per guestroom (first 3 months) | $3,500 | $8,000 |
| ESTIMATED TOTAL* | $95,892,590 | $158,033,990 |
*The estimated initial investment range is for a 300-guestroom Marriott, excluding land and permit fees, and other costs identified as not determinable. Investment estimates for other brands available in their respective FDDs.
| Type of Fee | Amount |
|---|---|
| Franchise Fees | 6% of gross room sales and 3% of gross food & beverage sales. |
| Program Services Contribution | An amount equal to: 1.62% of gross room sales (which includes a contribution to the marketing fund of 1% of gross room sales); plus $50,000 per year; plus $510 per guestroom per year. |
| Marriott Bonvoy | An amount equal to: 4.2% of the total guest folio generated by guests earning loyalty points or miles; plus 1% of qualifying event revenue for select meetings or group events involving at least 10 guestrooms and select catering events arranged by meeting planners or other individuals earning loyalty points or miles, up to a maximum charge of $300 per event. |
| Revenue Management Advisory Services | $2,900 to $8,000 per month, plus a one-time set-up fee that ranges from $3,500 to $5,000. |
| Cluster Revenue Management | Varies. |
| Area/Account Sales and Group Sales | Varies. |
| Account Sales: Group Lead | 6% of gross group room revenue (reduced to 3% of gross group room revenue if an intermediary is involved in generating the lead). This fee will not exceed $12,000 per booking (or $30,000 per booking if the hotel is a convention/resort hotel). |
| MI LEAD | 6% of gross group room revenue and gross event/catering revenue. This charge will not exceed $30,000 per booking. |
| Business Transient (BT) Booking | $123 to $291.40 per month, depending on the number of guestroom nights that are centrally reserved for the hotel through the area sales and multi-hotel sales organizations during the immediately preceding calendar year. |
| Customer Engagement Center (CEC) Property Support Services (PSS) | The cost of this program is allocated among participating hotels. Varies per guestroom type. |
| National Group Sales: Group Lead | $2.60 per room night booked. |
| National Group Sales: Catering Lead | $135 per catering opportunity booked. |
| National Group Sales: Extended-Stay Lead | $2.60 per room night booked. |
| Group Demand Generation | $1.00 per group room night booked. |
| General Sales Agents: Group Lead | $2.50 per room night booked. |
| Cooperative Advertising and Marketing Initiatives | Varies. |
| Gift Cards | Varies. |
| Intermediary Payments and Centralized Travel Agent Commission (CTAC) Usage | Varies. |
| QuickGroup Online Booking | 2% of gross group room revenue booked using QuickGroup (including revenue from select associated services, where applicable). No adjustments are made for changes after the initial booking. |
| Marriott Digital Services | Varies depending on the product or service selected. |
| Enhanced On-Platform Website Maintenance | $75 per month. |
| Transaction-Based Media | 8% of applicable gross room revenues, not to exceed $200 per stay. |
| Luminous | $995 |
| Point-of-Sale (POS) System | $17 to $30 per month per POS workstation for software, technical support, and “patching” services. |
| PMS Application Patching | $210 to $220 per month. |
| EMPOWER: Guest Experiences Reservations Add-On License | $550 per year per reservations agent at the hotel. |
| Varies. | |
| Continent Field Support | $7.34 to $9.50 per device per month. |
| Information Security Managed Detection and Response Services | $39 per device per year. |
| Opera Exchange Interface (OXI) License and Support | $440 per year. |
| Unauthorized Electronic Identifier | $100 per day an unauthorized email address, domain name, mobile application name, website, or other electronic identifier is in use. |
| Credit Card Processing | $0.047 per settlement transaction. |
| Computer and Server Software and Support | $13.81 to $25.00 per PC per month; $20.65 to $71.50 per Apple computer per month; $24.35 to $62.50 per server per month. |
| Mobile Device Management | $9 to $10 per device per month. |
| Mobile Key | $8 to $11 per guestroom per year for software and support. |
| Digital Self-Service Kiosk | $600 per device per year. |
| Interactive Voice Response | $150 to $1,000 per year. |
| Marriott Environmental Sustainability Hub (MESH) | $305 per year, plus an implementation fee of $59. |
| Audit Program | The annual cost to participate in the audit program is covered by the program services contribution. |
| Red Zone | Varies. |
| Audit Program/GSS Improvement Program | The then-current fee, presently $20,000 for up to 10 participants, plus $10,000 for up to an additional 10 participants. |
| Guest Satisfaction Survey Data Manipulation Charge | Up to $5,000 per quarter. |
| Food Safety Re-Inspection | $1,350 to $1,500 per re-inspection. |
| Fire Protection and Life Safety Re-Inspection (Audit Program-related) | $280 to $700 per re-inspection. |
| Property Improvement Plan (PIP) | $16,000 |
| PIP Revision or Modification | $5,000 per revision or modification. |
| Expired PIP Refresh | $8,000 to refresh a PIP that is 12 months past its initial issuance date; $16,000 to re-issue a PIP that is 24 months past its initial issuance date. |
| Design & Construction Review Services | $20,000 |
| Interior Design Firm Screening and Coordination | $2,500 per screen of interior design firm, plus $30,000 to $50,000 if franchisees retain a non-recommended interior design firm. |
| PIP and Renovation Non-Compliance | $16,000 per re-inspection. |
| Advisory Services | Varies. |
| Lender Comfort Letter Processing Fee | $2,500 |
| Prospectus Review | Varies. |
| Additional Design/Construction Review Services | Varies. |
| Fire Protection and Life Safety Inspection and Testing, and Compliance Audits | Approximately $500 to $19,500, based on the services rendered, the time needed for the testing and inspection, the size of the hotel, and the complexity of its design. |
| Post-Opening Authorization to Open (ATO) Work Inspection | $910 per day per inspector. |
| Expansion | $400 per guestroom. |
| Expansion Opening Authorization | $3,500 |
| Post-Approval Owner Background Check | $300 per entity/$100 per person. If additional enhanced due diligence is required, the cost ranges from approximately $400 to $5,600 per background check, depending on the country involved and whether an entity or person is being checked. Expedited turnaround is available at an additional cost. |
| Operator Screen | $7,500 |
| Management Company Transition Services | $5,500 |
| Temporary Closure and Re-Opening Support Services | $0 to $25,000 depending on the size and location of the hotel and the length of time the hotel is closed, and the level of support provided. |
| Destination and Resort Fees | Application fee of $1,500 plus $550 per year if the application to charge destination or resort fees is approved. |
| Learning & Development Bundle | $11.60 to $12.80 ($17.40 to $19.20 for JW Marriott hotels) per guestroom per year. |
| Conferences | Varies. |
| Transfer | The greater of $150,000 or $500 per guestroom. |
| Liquidated Damages | Varies, based on a formula. |
| Indemnification | Varies. |
| Removal of Hotel from System | $32,000 |
| Construction/Conversion Extension | $10,000 |
| Other Company Brand Conversion Authorization | Varies. |
| Global Recipe Database Support | $1.00 per guestroom per year (not to exceed $800 per year). |
| Best Rate Guarantee Non-Compliance | $50 to $500 per violation (based on the number of violations each month). |
| Customer Issue Resolution | $55 per customer complaint or other customer service issue handled by the franchisor, and reimbursement of all costs incurred by the franchisor to resolve a matter (including compensation paid by the franchisor to a guest). |
| Accounting Audit | The amount of the underpayment plus interest if an audit reveals an underpayment. |
| Interest on Overdue Amounts | Lesser of 18% per year or maximum interest rate permitted by law. |
| Costs and Attorneys’ Fees | Varies. |
| mCredit Customer Credit Reference Reports | $12 per report. |
| American Hotel and Lodging Association (AH&LA) | $4.50 per guestroom per year ($5.00 per guestroom per year for JW Marriott hotels). |
| Franchisee Associate Job Postings | $135 per Marriott.com job posting, or $145 per CareerBuilder.com job posting. |
| GM Awards | $300 to $1,500 per hotel per year. |
| Franchise Operations Support Resources | Varies; approximately $400 to $1,500 per day per employee, depending on the experience and area of expertise of the employee. |
Franchising with Marriott International offers the opportunity to leverage a globally recognized brand and access a wealth of resources and support. However, it’s crucial to conduct thorough due diligence, understand all costs and fees, and carefully review the Franchise Disclosure Document before making any commitments. By doing so, you’ll be better equipped to make informed decisions and set yourself up for success in the competitive hospitality industry.
For personalized guidance and assistance with navigating Marriott International franchise opportunities, contact Star Brands Consulting Ltd today. Our team of experienced consultants is here to help you achieve your franchising goals.