Hampton Inn Franchise in 2025: Costs, Fee & FDD
Discover the investment potential of a Hampton Inn franchise. Explore costs, fees, and benefits of joining Hilton Worldwide’s trusted brand, offering friendly service and amenities.
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Hampton by Hilton, originally known as Hampton Inn, is a prominent player in the hospitality industry. Founded in 1984 by the Promus Hotel Corporation, the franchise quickly established itself as a leader in offering friendly service and clean rooms at a reasonable price. Over the years, Hampton by Hilton has grown into a significant brand under the Hilton Worldwide umbrella, known for its commitment to delivering consistent quality and value to its guests.
The core offerings of Hampton hotels include comfortable accommodations with amenities such as a free hot breakfast, fresh coffee, and exercise rooms. The brand caters primarily to business travelers and families seeking reliable and affordable lodging options. With its focus on providing instant benefits and a seamless experience, including digital key and digital check-in, Hampton by Hilton has carved out a loyal customer base.
Currently, Hampton by Hilton boasts an impressive global presence, with over 2,500 locations across more than 30 countries. The franchise serves thousands of guests daily, making it one of the most extensive networks of franchised hotels in the world. Its scale and popularity are a testament to the brand’s ability to deliver on its promise of quality and value.
Hampton by Hilton offers robust support for its franchisees, including comprehensive training programs and access to preferred Hilton channels for marketing and reservations. Franchisees benefit from the parent company’s extensive resources and expertise, which help ensure the success of each location. The franchise’s dedication to maintaining high standards and supporting its franchisees makes it a sought-after franchise opportunity in the hospitality industry.
Hampton Inn Franchise Insights
- Hampton by Hilton has consistently ranked as the No. 1 hotel franchise in Entrepreneur Magazine’s Franchise 500® for 15 consecutive years, highlighting its strong market position and reliability.
- As part of the Hilton Worldwide family, Hampton by Hilton offers franchisees the advantage of leveraging the parent company’s extensive expertise and global recognition.
- With over 2,500 locations worldwide, Hampton by Hilton’s expansive network offers franchisees the opportunity to be part of a globally recognized and trusted brand.
- Hampton by Hilton’s commitment to guest satisfaction is evident in its offerings, such as free hot breakfast and friendly service, which help maintain a loyal customer base.
- The franchise’s dedication to innovation, including features like digital key and digital check-in, ensures that franchisees can meet the evolving needs of modern travelers.
Hampton Inn Franchise Key indicators
Growth YOY (%)
2%
vs industry 2%
Total U.S. Franchised Units
1,346
3-year Failure Rate
3%
vs industry 6%
How much does it cost to open a Hampton Inn franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Hampton Inn 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 Hampton Inn 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 Hampton Inn below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Franchise Application Fee | $100,000 | $100,000 |
| Property Improvement Plan | $0 | $10,000 |
| Market Study | Varies | Varies |
| Environmental Assessment | Varies | Varies |
| Real Property | Varies | Varies |
| Construction and LeaseholdImprovements | $11,139,759 | $16,090,763 |
| Design and EngineeringFees | $445,509 | $643,631 |
| Furniture, Fixtures andEquipment | $1,228,796 | $1,746,184 |
| Inventory and OperatingEquipment | $99,000 | $220,000 |
| Signage | $25,000 | $75,000 |
| Computer Hardware andSoftware Systems | $29,195 | $87,095 |
| Guest Internet Access System | $45,000 | $71,000 |
| Connected Room System | $20,500 | $24,500 |
| Delphi Sales and EventsSystem | $990 | $18,600 |
| Required Pre-OpeningTraining | $5,000 | $17,500 |
| ADA Consultant Fee | $2,500 | $10,000 |
| Construction/RenovationExtension Fees | $0 | $10,000 |
| Insurance | Varies | Varies |
| Organizational Expense | $50,000 | $122,900 |
| Permits, Licenses andGovernmental Fees | $167,096 | $241,361 |
| Miscellaneous Pre-Openingand Project Management Expenses | $334,193 | $482,723 |
| Contingencies | $1,113,976 | $1,609,076 |
| Additional Funds | $400,000 | $600,000 |
| Other Required Pre-openingServices Fees | $6,000 | $6,000 |
| TOTAL | $15,212,514 | $22,186,333 |
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
When considering opening a Hampton Inn franchise, it’s important to understand the capital requirements, including liquid assets and net worth, to ensure a successful venture. Here are the key financial aspects potential franchisees should consider:
- Initial Investment The total investment required for opening a Hampton Inn franchise ranges from approximately $15.2 million to $22.2 million. This investment is based on a standard 89-room hotel and covers various costs such as construction, equipment, and pre-opening 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 It is generally recommended that potential franchisees have access to liquid assets, which are cash or assets easily convertible to cash. While specific figures can vary, an estimated requirement for liquid assets is typically around 10% of the total investment, equating to $1.5 million to $2.2 million for a Hampton Inn.
- Net Worth Franchisees should also have a substantial net worth to support their investment. An estimated net worth requirement for a Hampton Inn franchise could be around $5 million to $7 million, ensuring the franchisee has the financial stability to manage ongoing operational expenses and potential unforeseen costs.
How much does a Hampton Inn franchise owner make?
Calculating the salary of a Hampton Inn 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 Hampton Inn 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.
Hampton Inn Revenue & Gross Sales
While specific median gross sales figures for Hampton Inn franchises are not publicly disclosed, the overall performance of the brand is well-regarded in the hospitality industry. Hampton by Hilton’s reputation for delivering friendly service, clean rooms, and reliable amenities such as free hot breakfast and exercise rooms contributes to its consistent demand among travelers. This strong brand reputation, coupled with the extensive global network of franchised hotels, suggests that Hampton Inn franchises generally perform well in terms of revenue generation.
Which key factors impact the average revenue performance of Hampton Inn franchisees?
Several factors contribute to the performance of U.S. franchisee median gross sales for Hampton Inn. The brand’s strong reputation for friendly service and clean rooms resonates well with travelers, enhancing occupancy rates. Access to Hilton’s extensive marketing resources and preferred Hilton channels ensures broad visibility and customer reach. The inclusion of amenities such as free hot breakfast and exercise rooms adds value, attracting both business and leisure travelers. Additionally, the brand’s focus on innovation, including digital key and digital check-in, caters to modern guests seeking convenience. These elements, combined with strategic location choices and effective franchisee support, significantly impact revenue performance.
Hampton Inn Franchise Operational Costs
Opening a Hampton Inn franchise involves understanding and managing several key ongoing operational costs. These expenses are essential for maintaining the quality and service standards that guests expect from the Hampton by Hilton brand.
Consider the following primary operational costs:
- Staffing Costs This includes salaries, wages, benefits, and training for employees to ensure high-quality service and smooth operations.
- Utility Expenses Regular payments for electricity, water, heating, and air conditioning, which are significant for running a hotel efficiently.
- Maintenance and Repairs Ongoing costs for maintaining the hotel’s infrastructure, including rooms, public areas, and amenities like exercise rooms.
- Housekeeping Supplies Expenses for cleaning supplies, linens, and other materials necessary to uphold the brand’s reputation for clean rooms.
- Food and Beverage Costs Budget for the free hot breakfast and fresh coffee offered to guests, which are key amenities of the Hampton Inn experience.
- Technology and Software Investment in digital systems such as digital key and digital check-in to enhance guest convenience and operational efficiency.
- Insurance Premiums Coverage for property, liability, and employee-related risks to safeguard the business.
- Property Taxes Payments based on the assessed value of the hotel property, which can vary by location.
Effectively managing these operational costs is crucial for the financial health and success of your Hampton Inn franchise.
Hampton Inn franchise fees
These fees contribute to the brand’s consistent quality and market presence, ensuring that franchisees benefit from the robust support and resources provided by Hilton Worldwide.
- Monthly Royalty Fee 6% of Gross Rooms Revenue. This fee is a standard charge for using the Hampton Inn brand, which helps maintain the high standards and operational excellence associated with Hilton hotels.
- Monthly Program Fee 4% of Gross Rooms Revenue. This fee is allocated towards various programs that benefit the entire Hampton Inn system. It covers essential marketing activities, including advertising, promotion, publicity, public relations, and market research.
- Additional Fees Franchisees may incur additional charges for training programs, technology enhancements, and other services provided by Hampton Inn.
Understanding these fees is vital for prospective franchisees as they plan their investment strategy and prepare for the financial responsibilities of operating a Hampton Inn franchise.
Hampton Inn franchise earnings
While specific earnings data for Hampton Inn franchises is not available, we can provide an informed overview based on industry standards and franchise characteristics. Typically, the profitability of a Hampton Inn franchise is influenced by several factors, including location, occupancy rates, and operational efficiency. The brand’s strong reputation for friendly service, clean rooms, and reliable amenities often result in high guest satisfaction and repeat business. Franchisees benefit from the extensive marketing resources and preferred Hilton channels, which help drive occupancy and visibility. Additionally, the brand’s focus on innovation attracts modern travelers seeking convenience, further enhancing potential revenue streams.
Effective management of operational costs, such as staffing, utilities, and maintenance, is essential to maximize profitability.
How to Open a Hampton Inn Franchise
Embarking on the journey to become a Hampton Inn franchisee involves a series of well-defined steps that guide prospective franchisees from the initial inquiry to the grand opening of their franchised hotel. This process ensures that potential franchisees are well-prepared and aligned with the brand’s standards and expectations, ultimately contributing to the successful operation of their Hampton Inn.
- 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).
- Franchise Application Complete and submit a detailed franchise application form. This document requires information about your financial status, business background, and personal details, which help assess your suitability as a potential franchisee.
- Evaluation and Approval The franchisor evaluates your application and conducts a thorough background check. If approved, you will receive a Franchise Disclosure Document (FDD) that outlines the terms and conditions of the franchise agreement, including costs, fees, and legal obligations.
- Site Selection and Approval Work with Hilton’s real estate team to identify and secure a suitable location for your Hampton Inn. The chosen site must meet the brand’s location criteria and receive approval from the franchisor.
- Franchise Agreement Signing Once the site is approved, sign the franchise agreement, which formalizes your partnership with Hilton Worldwide and grants you the rights to operate a Hampton Inn under their brand.
- Pre-Opening Training Participate in comprehensive training programs provided by Hilton. These sessions cover essential aspects of hotel management, brand standards, and operational procedures to prepare you for successful franchise operations.
- Construction and Setup Oversee the construction or renovation of your hotel property, ensuring it meets Hampton Inn’s design and quality standards. This phase includes acquiring necessary permits, licenses, and completing interior setup.
- Pre-Opening Marketing and Staffing Develop a marketing plan to promote your new Hampton Inn location. Hire and train staff members to ensure they are equipped to deliver the brand’s signature friendly service and clean rooms.
- Grand Opening and Operations Once all preparations are complete, host a grand opening event to introduce your Hampton Inn to the community. Begin operations, welcoming guests and providing them with the exceptional hospitality experience that Hampton by Hilton is known for.
Pros & Cons
Pros
Strong Brand Recognition: As part of the Hilton Worldwide family, Hampton Inn benefits from global brand recognition and a reputation for friendly service and clean rooms, which attracts a loyal customer base.
Innovative Features: With amenities like digital key and digital check-in, Hampton Inn stays at the forefront of hotel technology, appealing to modern travelers seeking convenience.
Consistent Demand: The brand’s offerings contribute to high occupancy rates, ensuring consistent demand from business and leisure travelers.
Cons
High Initial Investment: Opening a Hampton Inn requires a significant financial commitment, with total investments ranging from $15.2 million to $22.2 million, which may be a barrier for some investors.
Competitive Market: The hospitality industry is highly competitive, and franchisees must continuously innovate and provide exceptional service to maintain their market position.
Franchisor Control: Franchisees must adhere to Hilton’s strict brand standards and operational procedures, which may limit flexibility in business operations.
