Hotel Revenue Glossary · Financial

Franchise Fee

Fees and required contributions under a hotel franchise or licence agreement may cover brand, reservation, loyalty, marketing, technology, and other services. Scope, basis, amount, term, and exclusions vary; use the executed agreement and current statements.

Why it matters: Franchise fees are a significant cost that reduces NOI. Revenue managers must generate enough incremental revenue from brand affiliation (loyalty members, brand.com bookings, GDS access) to justify the franchise fee — otherwise the brand is a net cost.

All glossary terms Management Fee NOI (Net Operating Income) Distribution Channel