Hotel Franchise in India: Investments, Costs Breakdown & How to Apply

The hospitality industry of India has significantly progressed during the last years owing primarily to domestic and international tourism, business travel, and urbanization across the country.

The hotel franchise in India serves as an alluring investment option for such individuals, looking forward to cashing in on the burgeoning opportunities for quality accommodation.

This franchise brings global branding along with localized expertise, thus creating a win-win situation for the industry and travel lovers.

Owning a hotel franchise in India means establishing systems, operational support, marketing strategies, and systems that can drive profitability into the business.

With a diverse customer base and the rapidly growing middle class in India, investment in hotel franchises can yield high returns in the right locations and with proper management. Here is an elaborate discussion of the top 10 hotel franchises in India that are rewriting the rules of the game in the hospitality industry.

About the Brands

1. Mint Hotels 

• Historical Background: Mint Hotels was founded to serve the needs of mid-scale travellers who have a specific approach to them it’s comfort and affordability. The company has continued to set up its hotels in all capital cities to suit very price-conscious guests. 
• Key Milestones: The Mint Hotels have continuously added new properties into the network, now with operations in metros and tier-2 cities, serving the travelling public – business and leisure.
• Current Market Presence: The overall number of properties across India at present amounts to over thirty, which again has a strong urban-centric focus.
• Main Offerings: Budget rooms, dependable amenities, and fluid booking systems. 

2. Treebo Hotels 

• Historical Background: Treebo Hotels was established in 2015 and brought to budget stays a tech-enabled avatar. 
• Key Milestones: Expanded across 100+ cities in India within 3 years of its inception. 
• Current Market Presence: Over 600 properties pan-India. 
• Key Benefits: Standardized quality, affordability, and modernities.

3. Choice Hotels 

• Historical Background: Being a global brand hailing from the United States, Choice Hotels entered India’s market to provide mid-scale and luxury lodgings. 
• Key Milestones: Well-established brand in India with names like Comfort Inn and Quality Inn. 
• Current Market Presence: Across 32 locations within the Indian territory. 
• Main Offerings: Luxurious-midsized hotels with the hospitality of a world-class. 

4. Kyriad Hotels Franchise 

• Historical Background: It is a part of the Louvre Hotels Group. Kyriad occupies the mid-scale segment of India. 
• Key Milestones: Rapid infiltration into tier-2 and -3 cities to scoop in the underserved markets. 
• Current Market Presence: Present in over 20 cities in India. 
• Main Offerings: Combining local cultures into international standards of hospitality.

5. Mango Suites – Viera

• Historical Background: Mango Suites resorts to serviced apartments for long-stay plans aimed at business travellers.
• Key Milestones: Widespread popularity in IT hubs and business districts.
• Current market presence: Properties across 15 more major cities in India.
• Main Offerings: Big serviced apartments with kitchenettes and upscale amenities.

6. Marriott International

• Historical Background: A global leader in luxury hospitality, Marriott entered the Indian premises to redefine upscale and luxurious stays.
• Key Milestones: Launched brands like JW Marriott, Courtyard, and Fairfield in different parts of India.
• Current Market Presence: Over 135 properties in India.
• Main Offerings: Luxury, midsegmented and high-end hotel services focusing on an unmatched customer experience.

7. OYO

• Historical Background: OYO started in 2013, changing the face of budget hotels in India with an asset-light business model.
• Key Milestones: Extrapolated at a great pace to be one of the largest hotel chains in India. 
• Current Market Presence: 18,000+ properties in India. 
• Main Offerings: Affordable stays, tech-operated management systems, and easy booking.

8. Platinum Hotels Franchise

• Historical Background: Famous for its boutique-style properties, Platinum Hotels are for urban travellers looking for warmth and style. 
• Key Milestones: Carved a niche in the midscale boutique segment. 
• Current Market Presence: Operate in major metros and select tier 2 cities. 
• Main Offerings: Uniquely designed spaces, personalized service, and modern amenities.

9. Lemon Trees Hotels

• History: Lemon Tree Hotels is dedicated to offering mid-scale and upscale hotels focusing on sustainability and guest experience.
• Milestones: One of the major homegrown hotel brands in India.
• Presence in the Current Market: More than 80 properties across India.
• Major Offerings: Eco-sustainable properties, contemporaneous amenities, and great service.

10. FabHotels

• Historical Background: Started as a modern budget hotel chain focusing on offering standardized experiences at low prices.
• Key Milestones: Joined hands with more than 600 properties in a mere few years.
• Current Presence: Cater their services in major metropolises as well as tier-2 cities of India. 
• Main Offerings: Affordable properties but with consistent quality.

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Key Details of the Hotel Franchise in India/Product

Common Models for Hotel Franchise in India

Kiosk Model

Investments: Low
Space: Minimal (1,000-1,500 sq. ft.)
Best Suitability: Cites with heavy pedestrian traffic.

Full Hotel Model

Investment: Medium to High
Space: 3,000-10,000 or more square feet depending on brand.
Comprehensive service offerings: include anything from dining to amenity and capacity provision. 

Boutique Model

Investment: Moderate
Space: 2,500-4,000 sq. ft.
Offerings: Uniquely designed and themed accompanied by personalized services. 

Serviced Apartments Model

Investment: High
Space: 3,000-5,000 sq. ft.
Offerings: Long stays with additional amenities.

Hotel Franchise in India Cost Breakdown 

Initial investment in engaging with a hotel franchise in India comprises various costs, depending on various factors like the brand, location, and model. These include :

• Franchise Fee: INR 5 lakhs to INR 2 crores towards brand licensing.
• Construction & Setup: INR 2,000-INR 8,000 per sq. ft. according to type of property.
• Operational Equipment: INR 10 lakhs-INR 1 crore kitchen equipment, IT system and furnishing.
• Marketing & Branding: INR 2 lakhs to INR 10 lakhs covering promotional activities and signage.
• Working Capital: INR 20 lakhs to INR 1 crore for the operations of 6-12 months.
• Royalty Fee: ongoing franchisor support of between 8-15% of gross revenue.

With all these planned budgets, one could ensure of profitability and sustainability of the investment.

Hotel Franchise in India Profit Margin and ROI

Hotel franchise in India depend on their brand, location, and model for their profit margins. The profit margin includes:

• Budget Hotels: Profitability from 10-25% with ROI in 2-3 years.
• Mid-Scale and Upscale Hotels: Profitability ranging from 20 to 35% and ROI from 3 to 5 years.
• Luxury Hotels: Profitability from 30 to 40% with ROI in 4-6 years.

Franchisees can expand their profit margins by ensuring proper occupancy levels and great guest experiences.

Hotel Franchise in India Space Requirements

Some key factors are to be taken into consideration when choosing a space for a hotel franchise in India:

Location:

The distance from business hubs, attractions, and/or transit points. 

High visibility plus accessibility.

Size:

It has to be as per the chosen franchise model. 

Includes reception space, guest rooms, dining space, and parking facilities.

Infrastructure:

It must have enough plumbing, electrical and wifi installations. 

Potential for customization according to brand standards.

Benefits of the Hotel Franchise in India Investment

1. Building Brand Trust

An already-existing hotel brand provides instant credibility making a successful hotel franchise in India. This can funnel customer confidence and augment bookings, thanks to popular-created brand loyalties.

2. Marketing Backing

Centralized campaigns among digital and offline marketing, in-house SEO and reputation boosts, to create visibility on the internet.

3. Operational Support

Access to proprietary booking platforms and management systems. Renovation work and training of staff periodically about the smooth adaptation of quality.

4. Revenue Sources

Diverse revenue streams, such as rooms and food, with an additional possibility of events. An area with a prime location enjoys a higher average occupancy, guaranteeing higher returns on investment.

5. Scalability and Network Expansion

A brand can spread to more properties while retaining its identity as one brand. Guidance on franchising effectively coordinates operations in a scaling mode.

Documents Required to Buy a Hotel Franchise in India

While investing in a hotel franchise in India, one must have the following documents:

1: Identity Proof: Aadhar, PAN, Passport.

2: Business License: certificate or trade license for the operation of the business. 

3: Property Documents: Ownership deed, Lease deed or Tenancy proof. 

4: Financial Statements: Latest balance sheets, bank statements, and tax returns. 

5: Franchise Agreement: A signed contract for the terms and conditions.

How to Apply for a Hotel Franchise in India

1. Research & Shortlist: Consider brands that best align with your budget, location, and prospective audience.
   
2. Contact Franchisor: Visit their official website or franchise portal to inquire.
   
3. Submission of Documents: Submit all necessary documents and complete the application form.
   
4. Site Visit and Evaluation: Franchisor will evaluate your property for suitability.
   
5. Signing of Agreement: Negotiate terms and conditions, sign the contract, and pay the franchise fees.
   
6. Setup and Training: Prepare property with franchisor assistance and train staff.

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Frequently Asked Questions

1. What is a good amount for hotel franchises in India?

The variations in costs can be within the range of price INR 15 lakhs to 15 crores, based on the brand and model.

2. What is the usual profit margin in Hotel Franchise in India?

The profit margins vary from 20% to 40% profit.

3. List the important documents needed to establish a hotel franchise. 

Documents include identity proofs, business licenses, proof of ownership or lease of property, and financial statements.

4. What is the typical period for getting ROI?

The ROI is often realized within 2 to 5 years.

5. What makes Hotel Franchise in India profitable in India?

There is a growing trend of tourism both within and outside the country, increasing urbanization, and a strong brand name.

6. Can I set up a hotel franchise in tier-2 or tier-3 cities?

Yes, many brands such as Treebo and FabHotels are entering these parts of the country.

7. What sets Lemon Tree apart from other hotel chains?

Mid-scale and upscale services along with sustainability and eco politics add that special “Lemon Tree” touch to it.

8. What is the role of a franchisor in hotel operations? 

They provide branding, training, marketing, and operational support to franchisees. 

9. Is there any financing option made available for Hotel Franchise in India?

Yes, multiple banks as well as NBFCs provide loan schemes to facilitate hotel franchises.

10. Which skills are required to operate a Hotel Franchise in India? 

Essential skills in running a hotel franchise are good customer service, sound financial management, and high-level marketing skills.

Conclusion

Well, if someone’s becoming an entrepreneur and loves to dream a big dream, well, the best place for it to happen-the hotel franchise in India.

Franchising out there asks for slightly less investment, yet once set up in a reputed brand, an investor can experience an assembled power base of proven systems, strong marketing networks, and, most importantly, customer loyalty to help in building a business.

From budget tourists to the most extravagant seekers, hotel franchises cover diverse requirements and promise a healthy growth trajectory and profits.

Well, the turning point today is widely regarded as the most favourable for nurturing such investments within the hospitality industry when the demand for appreciable-quality accommodations is assumed to spike.