Hotel Franchise Fee Calculator
Compare what each flag really costs: royalty, program and marketing fees, fixed charges, and the initial fee, projected on your hotel's rooms revenue over the franchise term.
Step 1 · Pick the flags
Brands to compare
Pick two or three flags. Brands are grouped by parent company; choose "Independent" to see what dropping the flag saves.
Step 2 · Enter your hotel
Your hotel
Franchise fees are charged on gross rooms revenue, so the calculator needs the hotel's size and stabilized performance. Start from a preset or type your own numbers; every field below is editable.
Rooms revenue: —
Sources: each brand's Franchise Disclosure Document (FDD), Items 5 and 6, and brand development fee schedules. Fee terms last reviewed 2026-10-13. The FDD year behind each brand is listed under the comparison.
Step 3 · Compare
Year-one fees by component
Side by side
Financing a flag change or a new build?
Franchise fees flow straight through to NOI, so lenders underwrite them line by line. Share the deal with Bridge and see which lenders fit.
Submit a Loan RequestIllustrative only. Figures apply each brand's published fee schedule from its Franchise Disclosure Document to your inputs; brands negotiate fees on individual deals, update schedules with each FDD, and charge additional items such as technology, loyalty, and PIP fees that vary by property. Confirm current terms with the brand before relying on these estimates.
Common questions
Frequently asked questions
How are hotel franchise fees calculated?
Most brands charge two recurring percentages of gross rooms revenue: a royalty for use of the brand, and a program or marketing fee that funds the reservation system, loyalty program, and national advertising. Some brands add a royalty on food and beverage revenue or fixed annual and per-room charges. On top of that, there is a one-time initial fee when the franchise agreement is signed.
What is a typical total franchise fee for a select-service hotel?
For the major Hilton, Marriott, IHG, and Hyatt select-service flags, royalty and program fees together usually land between 8% and 11% of rooms revenue once incentives expire. Economy and midscale brands tend to run lower in percentage terms but may add fixed per-room charges. The calculator shows the combined figure in dollars and as a share of rooms revenue for each brand you pick.
What is the difference between the royalty and the program fee?
The royalty is the brand's compensation for the flag and is pure cost to the owner. The program fee, sometimes called the marketing, system, or services contribution, is pooled and spent on the reservation and distribution systems, loyalty program, and brand advertising that drive bookings. Lenders underwrite both as operating expenses below gross operating profit.
How much is the initial franchise fee for a hotel?
Initial application fees for the major brands generally range from about $50,000 to $100,000 for a new-construction hotel, often covering a set number of rooms with a per-room adder above that count. Conversions and changes of ownership are usually priced differently, sometimes higher, and may carry a separate property improvement plan (PIP) review fee. Select the deal type in the calculator to see the right figure.
Do franchise fees change during the term?
They can. Some brands offer a ramp, with a lower royalty in the first years of a new hotel, and brands update their fee schedules each time they issue a new Franchise Disclosure Document. The calculator uses the stabilized rate from the most recent FDD we have reviewed and notes the FDD year for every brand, so confirm the current schedule with the brand before signing.
Where does the data in this calculator come from?
Fee terms are taken from each brand's Franchise Disclosure Document, Items 5 and 6, which franchisors must file with state regulators, supplemented by the brands' published development fee schedules. Every brand shows the FDD year its figures come from. Franchise fees are negotiated on larger or strategic deals, so treat the output as the published schedule, not a quote.