THM Franchise & Brand Fee Review
Trailing 12 months, May 2025 to April 2026 (last closed franchise period). Source: RevParPro QBO P&L (pl_transactions) + brand invoices (Marriott MGS, IHG SmartPay). HOURP and HOUZN are Marriott SpringHill Suites; HOUUS is IHG Holiday Inn Express.
Total brand load TTM
$2.26M
3 hotels, fees + distribution
Mandatory brand fees
$1.32M
royalty + program services
Program Services (confirmed)
$569K
Marriott $481K of it, ~4.7%, contractual
Distribution / commissions
$0.94M
OTA, agency, loyalty, marketing
Effective rates vs brand schedule
| Hotel / Brand | Room rev TTM | Royalty | Royalty % | Program Svcs | Prog Svcs % | Combined % |
|---|
| HOURP Marriott SHS | $6,482,454 | $367,552 | 5.7% | $305,273 | 4.7% | 10.4% |
| HOUZN Marriott SHS | $3,714,126 | $201,575 | 5.4% | $176,124 | 4.7% | 10.2% |
| HOUUS IHG HIEX | $2,926,519 | $185,743 | 6.3% | $87,581 | 3.0% | 9.3% |
Rates computed on transient + group room revenue (Business + Pleasure + Group). The brand contractual base (gross room sales) also includes cancellation, no-show, and attrition, so the true contractual rate is marginally lower than shown. IHG rates (6% royalty, 3% services) tie exactly to invoice A001781992. Marriott royalty ties to ~5.5%. Marriott Program Services at ~4.7% is the bundled Program Services Contribution (marketing fund 2.5% plus reservations, systems and loyalty), confirmed against the HOURP and HOUZN relicensing franchise agreements (Exhibit A). Contractually supported, not an overcharge.
Per-hotel brand cost breakdown (TTM)
| HOURP — Marriott SpringHill Suites | TTM $ | % of room rev |
|---|
| Mandatory brand fees | | |
| Franchise Royalty Fees | $367,552 | 5.7% |
| Program Services (confirmed: bundled PSC) | $305,273 | 4.7% |
| Distribution / marketing | | |
| Travel Agency Commissions | $138,947 | 2.1% |
| Loyalty Program | $83,937 | 1.3% |
| Sales & Marketing Services | $12,854 | 0.2% |
| Digital Marketing | $9,011 | 0.1% |
| Technology / other | | |
| Internet Services | $49,810 | 0.8% |
| Software & Systems | $20,368 | 0.3% |
| Training Services | $3,551 | 0.1% |
| Total brand load | $991,303 | 15.3% |
| HOUZN — Marriott SpringHill Suites | TTM $ | % of room rev |
|---|
| Mandatory brand fees | | |
| Franchise Royalty Fees | $201,575 | 5.4% |
| Program Services (confirmed: bundled PSC) | $176,124 | 4.7% |
| Distribution / marketing | | |
| Travel Agency Commissions | $111,911 | 3.0% |
| Loyalty Program | $64,280 | 1.7% |
| Sales & Marketing Services | $29,349 | 0.8% |
| Digital Marketing | $1,465 | 0.0% |
| Technology / other | | |
| Internet Services | $24,601 | 0.7% |
| Software & Systems | $15,087 | 0.4% |
| Training Services | $3,574 | 0.1% |
| Total brand load | $627,966 | 16.9% |
| HOUUS — IHG Holiday Inn Express | TTM $ | % of room rev |
|---|
| Mandatory brand fees | | |
| Franchise Royalty Fees | $185,743 | 6.3% |
| Program Services (3% services contribution) | $87,581 | 3.0% |
| Distribution / marketing | | |
| OTA Commissions | $86,246 | 2.9% |
| Loyalty Program | $88,321 | 3.0% |
| Travel Agency Commissions | $53,309 | 1.8% |
| Sales & Marketing Services | $48,108 | 1.6% |
| Digital Marketing | $46,816 | 1.6% |
| Technology / other | | |
| IHG Services | $27,874 | 1.0% |
| Internet Services | $12,767 | 0.4% |
| Guest Relations | $3,464 | 0.1% |
| Training Services | $2,500 | 0.1% |
| Total brand load | $642,729 | 22.0% |
Findings, ranked by dollar impact
| # | Finding | Impact |
|---|
| 1 | Marriott Program Services runs ~4.7% of room sales at both SpringHills, nearly equal to the 5.5% royalty. Combined $481K/yr (HOURP $305K, HOUZN $176K). IHG by contrast charges 3.0%. CONFIRMED against both SpringHill relicensing agreements (Exhibit A): royalty 5.5%, Marketing Fund 2.5% (cap 3.5%), bundled inside the broader Program Services Contribution that Marriott sets per Section 3.7. The ~4.7% is the modern bundled PSC, contractually supported, not an overcharge. The lever here is the revenue base, not a fee dispute. | confirmed, no dispute |
| 2 | HOUUS carries the heaviest brand load at 22.0% of room revenue (HOURP 15.3%, HOUZN 16.9%). IHG mandatory stack is 9.3% vs Marriott 10.2-10.4%, so the gap is distribution: OTA $86K + Travel Agency $53K + Loyalty $88K + Digital $47K = $275K/yr on a $2.9M base. Direct-booking and channel-mix shift moves the most money here. | ~$29K/yr per 1% OTA shifted |
| 3 | Loyalty load is highest at HOUUS (3.0% of rooms, $88K) vs HOURP 1.3% and HOUZN 1.7%. IHG reward-night reimbursements net against charges (invoice A001781992 shows a -$6,415 reward-night credit), so confirm Kareem is capturing all reimbursements and reward-night revenue is posting. | verify nets |
| 4 | Travel Agency / GDS commissions total $304K/yr (HOURP $139K, HOUZN $112K, HOUUS $53K), fully channel-driven. Each GM should review commissionable-channel share with revenue management. | $304K/yr controllable |
| 5 | HOURP March 2026 spike is not an error. Royalty $67K and Program Services $51K that month track a room-revenue spike to $1.21M (vs ~$500K norm); the effective rate held at 5.5%. Flagged so it is not mistaken for an overcharge. | no action |