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FRANCHISE FEE CALCULATION Number of Rooms 200 Average Daily Rate $60.00 ADR Growth 3% per year Daily Paid Occupancy Year 1 60% Year 2 65% Year 3 70% Year 4-10 75% Number of reservations from Franchisor: 30% of occupied rooms Assumptions: Initial Fee: $350 per room Royalty Fee: 4% of gross room Revenue Adverstising/Marketing Fee: $.24 per room sold Reservation fee: 1% of gross room revenue Plus $1.00 per roomnight booked through reservation system Infee 350 Royalty 0.04 Ad/mkt 0.24 Resfee 0.01 plus$1.00 per room sold through res system CALCULATION OF FRANCHISE FEES FOR 10 YEAR PERIOD YEAR ROOMS GROSS INITIAL ROYALTY ADV/MKT RES TOTAL TOTAL FEE % OF SOLD ROOM FEE FEE FEE FEE FEES ROOM REVENUE REV 1 43800 $ 2,628,000 $ 70,000.00 $105,120 $10,512
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