Aloft Hotels Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$13,296,610 - $36,220,410
Franchise Fee
$10,000
Total US Locations
166
Business Summary
Aloft Hotels provide high-quality accommodations and related services to a diverse clientele, including business travelers, groups, families, and vacationers. These select-service hotels typically feature 80 to 270 guestrooms and are found in urban or suburban areas. Aloft Hotels are known for their intelligent design, modern technology, and lively social atmosphere, incorporating distinct features such as a W XYZ® Bar, Re:mix Lounge®, Re:fuel Grab & Go® store, and dedicated meeting and recreation spaces.
Corporate History
Aloft Hotels were first introduced to the market, with franchising offered by subsidiaries of Marriott International, Inc. from 2006 until March 2017. The current franchisor, MIF, L.L.C., a Delaware limited liability company established in 2012, has been offering franchises for Aloft Hotels since March 2017. Marriott's subsidiaries have also been involved in owning and managing Aloft Hotels since 2006, contributing to the brand's presence in the market.
Financial Overview
Investment Range
$13,296,610 - $36,220,410
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$150,000
Royalty %
5.5%
Marketing %
1%
Equipment Costs (Low)
$16,971,200
Equipment Costs (High)
$34,421,900
Working Capital
$412,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
MIF, L.L.C., the franchisor for Aloft Hotels, appears to be in a strong financial position, as indicated by its audited financial statements. The independent auditors, Ernst & Young LLP, have issued an unmodified opinion for the fiscal years ended December 31, 2024, 2023, and 2022, signifying that the financial statements are presented fairly in all material respects and do not raise any 'going concern' issues. The company has been consistently profitable, reporting net income of $63.8 million in 2024, $64.1 million in 2023, and $53.5 million in 2022. Aloft Hotels maintains positive working capital, with current assets exceeding current liabilities. A significant portion of the company's assets includes substantial amounts 'Due from related parties' (primarily Marriott International, Inc. and its subsidiaries), totaling $443.5 million in 2024. This related-party balance also generates considerable interest income, contributing to the company's overall profitability. The company has not recorded any impairment charges on its intangible assets, which include capitalized costs to acquire franchise and license agreements, and no accruals for legal contingencies were present at year-end 2024. While the allowance for credit losses increased from $345,000 in 2023 to $1.4 million in 2024, this amount is relatively minor compared to the company's total assets and revenues. The financial statements indicate that the company operates without a direct cash balance, with transactions largely managed through related party accounts.
Financing Details
Aloft Hotels generally does not offer direct or indirect financing for its franchised hotels or guarantee franchisee loans. However, under specific, limited circumstances and at its sole discretion, Aloft Hotels may provide certain financing assistance. Two primary forms of direct financing support are: 1. **Contingent Guaranty of a Loan**: Aloft Hotels may offer credit support by contingently guaranteeing a portion of a loan provided by a third-party lender. The specific terms of this guaranty, such as the amount (which could be a percentage of the loan principal or development costs), repayment obligations, guaranty fee, interest, and security requirements, will vary depending on the particular transaction. 2. **Mezzanine Loan**: Aloft Hotels may also, in certain situations, make mezzanine loans to franchisees. The precise terms of these loans, including the amount, annual percentage rate, term, payment schedule, and security requirements, are determined on a case-by-case basis and are not standardized. Additionally, Aloft Hotels offers **Development Incentive Programs** that can reduce the financial burden on franchisees: * **New Development Incentive Program**: For newly constructed Aloft Hotels (not conversions), if the project is approved between March 31, 2025, and March 30, 2026, and meets specific construction and opening timelines, franchisees can receive: * A discounted application fee of $10,000. * A 'Key Money Incentive' of $5,000 per guestroom, paid 30 days after the hotel's opening. * Reduced franchise fees for the first three years: 3% of gross room sales in year 1, 3.5% in year 2, and 4% in year 3, before increasing to the standard 5.5% from the fourth year onward. * **Modular Construction Projects Incentive**: For new hotels using approved modular construction methods, applied for within the same timeframe as the New Development program, with slightly different construction completion timelines, franchisees can receive: * Up to $200,000 in 'Key Money' for custom guestrooms with custom décor. * Up to $250,000 in 'Key Money' for prototype guestrooms with prototype décor. * This incentive is paid 60 days after the hotel's opening. If the franchise agreement is terminated early, the unamortized portion of this incentive must be repaid, and delays in opening can reduce the incentive amount. Aloft Hotels considers various factors when deciding on these offers, including market opportunities, hotel size and location, economic conditions, the franchisee's development costs, and their commitment to system growth. These incentives are generally non-transferable and cannot be combined with other offers.
Performance Metrics
Total US Locations
166
Franchised Units
164
Corporate Units
2
Avg Square Footage
58,750
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
22
Bankruptcy History
Aloft Hotels has no bankruptcy history to disclose in this document. Item 4 explicitly states, "No bankruptcy is required to be disclosed in this disclosure document."
Agreement Terms
Initial Term
20 years
Training & Support Program
Franchisor Assistance
Aloft Hotels franchisees receive substantial support throughout their franchise term. Before opening, Marriott provides design and construction criteria, along with other information for planning, constructing, renovating, and furnishing the hotel, including specifications for furniture, fixtures, and equipment (FF&E) and supplies. Marriott reviews construction drawings for compliance with brand standards and conducts periodic compliance assessments during construction or conversion. They offer input for procuring operating supplies and FF&E, and conduct site visits to confirm the hotel's readiness for opening. Marriott trains the general manager and hotel management team, and provides hotel staff with on-site training or training tools. All standards, procedures, systems, guides, and programs are made available through electronic systems. After opening, Aloft Hotels franchisees can consult with Marriott representatives at designated offices or at their hotel regarding design and operation. Marriott ensures access to its reservation system and takes steps to preserve and protect the ownership and validity of its Proprietary Marks, offering indemnification against infringement claims under certain conditions. Marriott continually makes its standards available, which are subject to change, and offers various training programs for hotel or management personnel, although tuition, fees, or reimbursements may apply. Marriott directs the activities of a Marketing Fund, which is used for advertising, sales, marketing, and promotional programs, covering brand communication, market research, loyalty programs, and digital platform development. The Global Sales Organization is mandatory for franchisees, while other Marriott Sales Organizations (Area Sales, Multi-Hotel Sales) are optional with charges for accepted leads. Other marketing initiatives, such as email marketing and search engine marketing, are also offered. Technologically, franchisees are required to implement and maintain various electronic systems, including a Property Management System (PMS), Opportunity Management Systems (like SFAWeb/GPO, OneSource, CI/TY), a Guest Experience Platform (GxP), Point-of-Sale (POS) system, Reservation System, Yield Management System, Marriott Communications Network (MCN), Continent Field Support, Digital Guest Services, Hotel Lock System (including Mobile Key), Mobile Device and Application Management, Guestroom Entertainment Platform, Lobby PC, Associate Alert Devices, Public Area Audio/Visual System, Digital Ordering Platform, Intranet Website (MGS), MDash, Information Security Managed Detection and Response Services (EDR/MDR), and Marriott Environmental Sustainability Hub (MESH). Updates, upgrades, and replacements to these systems are continuously required.
Initial Training Hours
112
Ongoing Support
Aloft Hotels franchisees receive continuous support after opening to help maintain brand standards and operational efficiency. This includes ongoing access to Marriott's reservation system and representatives available for consultation at designated offices or at the hotel regarding design and operational matters. Marriott actively protects its Proprietary Marks and provides updated standards for hotel operation. For training and development, Aloft Hotels franchisees participate in a Learning & Development Bundle, which covers certain required ongoing training programs and is billed annually per guestroom. General Managers are required to attend annual General Managers Conferences, for which a registration fee applies, and participate in brand immersions for new GMs. Brand awards events are also held annually. Marriott offers optional leadership development programs for a fee. Hotels that fail to meet quality assurance requirements may be mandated to participate in the Audit Program/GSS Improvement program, or may receive Brand Advocate visits if guest satisfaction thresholds are not met. In terms of sales and marketing, franchisees contribute to and benefit from a Marketing Fund that finances ongoing advertising, sales, marketing, and promotional programs. These activities include brand communication, market research, loyalty program management, and the development and maintenance of Marriott's websites and mobile applications. Franchisees also have access to the mandatory Global Sales Organization (GSO) and optional Marriott Sales Organizations (Area Sales, Multi-Hotel Sales), with charges for accepted leads. Other marketing initiatives like email marketing and internet search engine marketing are also available. Technological support involves ongoing maintenance for mandatory electronic systems such as the Property Management System (PMS), Guest Experience Platform (GxP), and Marriott Communications Network (MCN), with costs covered by the Program Services Contribution. Franchisees pay ongoing fees for endpoint detection response (EDR) software, managed detection and response (MDR) services, point-of-sale (POS) system software and support, lock system software, and public area audio/visual systems. Support for the Marriott Environmental Sustainability Hub (MESH) software is also provided. Updates, upgrades, and replacements to these systems are continuously required. Operational oversight includes periodic inspections and audits by Marriott representatives to ensure compliance with brand standards and quality assurance programs. This can lead to mandated remedial programs or on-site visits for underperforming hotels. Marriott also facilitates centralized payment of commissions to travel intermediaries through the Centralized Travel Agent Commission (CTAC) program and enforces food safety standards, with re-assessments and associated fees for non-compliance.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
commercial
Owner Participation
absentee-allowed
Territory Type
non-exclusive
Territory Size Requirements
Aloft Hotels typically do not grant franchisees an exclusive territory. If a territory is granted, it is non-exclusive and its specific size, geographic area, and duration depend on the market in which the Aloft Hotel site is located. Such a territory might be defined as a radius around the Aloft Hotel or by specific streets, highways, or other geographical boundaries. However, the document does not provide specific numerical or demographic requirements for the size of these potential territories, indicating that the franchisor and its affiliates retain the right to develop other lodging products, including other Aloft Hotels, near a franchisee's location.
Staffing Notes
Aloft Hotels require a General Manager who has completed the franchisor's training program and other managers to dedicate full-time to the management and operation of the hotel. All associates, including hourly, management-level, and general managers, must complete mandatory training in subjects such as Brand & Service, Ethics + Integrity, Functional Operations, Electronic Systems, Leadership Development, and the Loyalty Program. For instance, Brand & Service training typically ranges from 6 to 12 hours depending on the associate's role. General Managers of Aloft Hotels with 110 or more guestrooms must complete 75 hours of Leadership Development – Connect U Training, along with one additional manager (excluding sales managers). New-to-Marriott franchisee executives are required to attend Executive Orientation. If a franchisee is deemed unqualified or unfamiliar with the system, they may be required to participate in programs like the Franchisee Introduction to Marriott (FITM) or Franchisee OnBoarding for New Development (FOND). Additionally, if an Aloft Hotel fails to meet certain quality assurance performance thresholds, remedial training programs (such as the Audit Program/GSS Improvement program) may be mandated. In some cases of non-compliance, the franchisor may require the retention of an approved third-party management company. For Aloft Hotels with a residential, condominium, or multi-family component, the director of residences (residential leader) must attend a five-day residential on-boarding training session.