Hospitality Franchise
Cost, fees, owner earnings, closure rate and litigation for a Hospitality franchise — pulled from the franchisor's own public FDD (2025), not its sales material.
Disclosure honesty
Hospitality discloses little or no owner-earnings data (Item 19) — the franchisor won't put real profit in writing.
What their own earnings claim actually says
Franchisor makes no financial performance representations. Employees prohibited from making any earnings/success claims orally or in writing.
What a Hospitality franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $40,000 | Item 5 — paid up front, before you open |
| Royalty | 8% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 2% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 10% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $45,500 – $64,500 | Item 7 — franchisor's own low/high estimate |
Royalty 8% revenue; Marketing 2% + $40/mo; Technology $55/mo; Local marketing 3% required
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Hospitality system size and owner turnover
| Total outlets | 189 |
| Ceased operations | 11 |
| Terminated by franchisor | 19 |
| Transferred to new owners | 2 |
| Closure rate | 5.8% of outlets |
49 outlets ceased/terminated/not renewed in 3 years; system declining
From Item 20 of the FDD 2025. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is Hospitality worth it? — how it compares to 436 similar franchises
| Ongoing fees | 10% of sales | steeper than 74% of other franchises franchises |
| Startup cost | from $45,500 | cheaper than most (median $138,750) |
| Disclosure honesty | Grade D | typical for the category |
| Closure rate | 5.8% of outlets | worse than 76% of peers |
| Disclosed lawsuits | 0 | fewer than most |
Benchmarked against every other franchises franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Hospitality
The franchisor's framing: Franchisor makes no financial performance representations. Employees prohibited from makin… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
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Hospitality franchise — frequently asked
- How much does a Hospitality franchise cost?
- The FDD lists a total initial investment of about $45,500–$64,500, including a $40,000 initial franchise fee.
- How much do Hospitality franchise owners make?
- Hospitality discloses little or no earnings data (Item 19) — meaning the franchisor won't put real owner profit in writing. That's a red flag worth questioning.
- What are the Hospitality franchise fees?
- Hospitality's FDD discloses a $40,000 initial franchise fee, a 8% royalty on gross sales, a 2% advertising-fund contribution, for roughly 10% of gross sales in recurring fees before rent, labor, or debt service. Royalty 8% revenue; Marketing 2% + $40/mo; Technology $55/mo; Local marketing 3% required
- What is the Hospitality franchise profit margin?
- Hospitality discloses no Item 19 earnings representation, so no profit margin can be derived from the FDD at all. Any margin figure quoted elsewhere is an estimate, not a disclosure.
- What is the Hospitality franchise failure rate?
- 49 outlets ceased/terminated/not renewed in 3 years; system declining
- How many Hospitality locations are there?
- Hospitality's FDD reports 189 total outlets, with 11 that ceased operations in the most recent reporting year and 2 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Hospitality have complaints or lawsuits?
- Hospitality discloses no material litigation in Item 3 of the filing we reviewed. That's a positive signal, though it covers only what the franchisor is required to report.
- Is a Hospitality franchise worth it?
- It depends on the numbers, not the pitch. Hospitality scores D on disclosure honesty, carries about 10% of sales in ongoing fees. Get the real owner take-home before you sign.
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Compare Hospitality to similar franchises
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Source: MN CARDS 34285-202505-07 (Clean FDD 2025). FranchiseValidate is independent and not affiliated with Hospitality or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.