Courtyard By Marriott Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$14,853,210 - $40,502,610
Franchise Fee
$90,000
Total US Locations
1,037
Business Summary
Courtyard by Marriott hotels offer high-quality accommodations and related services to a diverse clientele including businesspersons, groups, families, and vacationers. These select-service hotels typically range from 90 to 175 rooms, often featuring amenities such as The Bistro Bar, Starbucks coffee, a 24-hour snack market, updated exercise facilities, and outdoor terraces. Courtyard by Marriott hotels are generally located in urban or suburban markets, providing signature guest experiences as part of a unified system.
Corporate History
MIF, L.L.C., the franchisor for Courtyard by Marriott, was established in Delaware in 2012 as a subsidiary of Marriott International, Inc. (MII), a publicly-traded corporation. While MIF, L.L.C. was formed more recently, its predecessors have owned and managed Courtyard hotels since 1983. Courtyard by Marriott began offering franchises in October 1990. The brand has grown significantly, with Marriott and its affiliates operating 163 Courtyard hotels and franchising 912 in the United States and Canada as of December 31, 2024. Marriott International has also expanded its portfolio through various ventures, including outdoor-focused lodging, home and villa rentals, and strategic licensing agreements with other major hospitality brands.
Financial Overview
Investment Range
$14,853,210 - $40,502,610
Franchise Fee (Low)
$90,000
Franchise Fee (High)
$175,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$1,608,400
Equipment Costs (High)
$3,712,700
Working Capital
$382,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
MIF, L.L.C. demonstrates strong financial health with consistent profitability and a robust equity position. The company reported net income of $63.8 million in 2024, $64.2 million in 2023, and $53.6 million in 2022. Its total assets were $477.1 million in 2024, with total member's equity at $466.3 million, indicating solid financial backing. The company's financial operations are managed through intercompany accounts with its parent, Marriott International, Inc., as it does not hold a direct cash balance; instead, it has a substantial and growing net receivable from related parties, amounting to $443.6 million in 2024. While there is an allowance for credit losses on trade receivables, it is relatively small compared to total assets. The independent auditors have issued an unqualified opinion, affirming that the financial statements present the company's financial position fairly in all material respects.
Financing Details
Courtyard by Marriott generally does not offer direct or indirect financing for its franchised hotels. However, in limited and discretionary circumstances, the franchisor may offer credit support, such as a contingent guaranty for a portion of a loan from a third-party lender or a mezzanine loan. The specific terms of such arrangements, including amounts, interest rates, repayment obligations, and security requirements, are determined on a case-by-case basis, and the franchisor does not provide standard loan documents. Additionally, Courtyard by Marriott offers a Modular Construction Development Incentive Program for certain new-build hotels. This program provides 'Key Money' payments, ranging from up to $150,000 to $250,000, 60 days after the hotel's opening, depending on the type and extent of modular construction used. If the franchise agreement is terminated early, the unamortized portion of this incentive must be repaid, and the incentive amount can be reduced for construction delays.
Performance Metrics
Total US Locations
1,037
Franchised Units
876
Corporate Units
161
Avg Square Footage
65,500
Franchising Since
1990
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
20
Litigation Summary
Courtyard by Marriott, through its parent company Marriott International, has been involved in several significant legal matters. One major ongoing issue stems from a 2018 data security incident, leading to numerous class action lawsuits consolidated into a Multidistrict Litigation (MDL) in Maryland. These cases allege negligence, invasion of privacy, and consumer protection violations. While a class certification decision was vacated in August 2023, it was later reinstated by the District Court, and Marriott has appealed again, with oral arguments held in November 2024. Additionally, the City of Chicago has an ongoing lawsuit from 2019 related to this incident, with a trial date set for November 2025. This data breach also triggered administrative investigations globally; resolutions were reached with the FTC and attorneys general from 49 U.S. states in October 2024 (involving a $52 million payment), but investigations by the Turkish KVKK (with an ongoing appeal from December 2023) and the Australian OAIC (with assessments due by December 2025) are still active. Separately, 16 Canadian class action lawsuits related to the same data breach are consolidated and ongoing in Ontario. Marriott also faces ongoing investigations and litigation regarding the display of destination, resort, and amenity fees. While resolutions have been reached with several states, the District of Columbia's investigation remains open, and a 2019 lawsuit by the District of Columbia is scheduled for trial in November 2025. In franchisor-initiated litigation, Marriott successfully arbitrated a $5 million claim against Arkansas Knoxville Hotel, LP in 2023, settling in April 2024. In September 2024, Marriott was awarded $1.95 million in an arbitration against Lucky Cleveland Holdings LLC for unpaid fees. An August 2024 breach of contract lawsuit against Pride Hotel, LLC for liquidated damages was settled shortly after filing. Other pending actions include two putative class action lawsuits filed in 2024 (Portillo v. CoSTAR Group, Inc. and Segal v. Amadeus IT Group, S.A.) alleging antitrust violations related to data sharing at luxury hotels, both with motions to dismiss currently pending. A civil suit, Hall v. Marriott (2022), resulted in a $16 million jury verdict against a franchisee and Marriott in October 2024, which is currently under appeal. Several past lawsuits from 2019-2022, primarily related to property system incidents or resort fees, have been concluded through dismissal or individual/confidential settlements.
Bankruptcy History
Courtyard by Marriott has no bankruptcy history to disclose for itself, its predecessors, its affiliates, or any of its principal officers, as no bankruptcy is required to be disclosed in this disclosure document.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Courtyard by Marriott franchise agreements are not renewable, and franchisees should not expect to be granted any right to operate the hotel under the brand after the expiration of the term. However, the franchisor may, in its sole discretion, agree to enter into a new franchise agreement with the franchisee after the current term expires. This potential new agreement would be based on the then-current form of franchise agreement, which could include materially different terms, conditions, and franchise fees compared to the original agreement.
Training & Support Program
Franchisor Assistance
Courtyard by Marriott provides comprehensive assistance throughout the life of the franchise. Before opening, the franchisor offers design and construction criteria, specifications for furniture, fixtures, and equipment, and input on procurement. They review construction plans for compliance, conduct site assessments during construction, and verify the hotel's readiness to open. Extensive pre-opening training is provided for the general manager and management team, including on-site training and tools for hotel staff on operating systems and brand standards. After the hotel opens, ongoing support includes consultation from franchisor representatives on design and operations, and access to a wide array of electronic systems. These systems encompass property management, reservation, yield management, opportunity management, guest experience platforms (GxP), point-of-sale (POS) systems, the Marriott Communications Network (MCN), continent field support, digital guest services, hotel lock systems with mobile key functionality, guestroom entertainment platforms, lobby PCs, associate alert devices, and intranet websites like Marriott Global Source (MGS) and MDash. Marketing and advertising efforts are centralized through a Marketing Fund for broad brand promotion and a mandatory Global Sales Organization (GSO), with other regional sales organizations being optional. Franchisees are also responsible for local advertising. The franchisor administers the Marriott Bonvoy loyalty program. Ongoing training programs are provided for various roles, including brand and service, consumer operations, ethics, functional operations, and electronic systems, often delivered through web-based modules. Mandatory third-party training for alcohol awareness and food safety is also required. An annual General Managers Conference is held. Special programs like Franchisee Introduction to Marriott (FITM) and Franchisee OnBoarding for New Development (FOND) are available for new franchisees, and underperforming hotels may be required to participate in Audit Program/GSS Improvement programs. The franchisor also offers food and beverage support and handles customer issue resolution for unresolved complaints.
Initial Training Hours
112
Training Location
Franchisee's location (on-site) and franchisor-designated locations
Ongoing Support
Courtyard by Marriott offers extensive ongoing support to its franchisees after the hotel opens. This includes regular consultation from franchisor representatives, who are available at Marriott's offices or at the franchisee's hotel to advise on design and operations. Franchisees are provided with and must utilize comprehensive electronic systems, including property management, reservation, and yield management systems, as well as various digital platforms for guest services, point-of-sale, and internal communications like the Marriott Communications Network (MCN), Marriott Global Source (MGS) intranet, and MDash. The franchisor manages the Marriott Bonvoy loyalty program and a centralized Marketing Fund that supports broad advertising, sales, and promotional activities. Additionally, Marriott Sales Organizations provide lead generation and booking services, with the Global Sales Organization (GSO) being mandatory. Ongoing compliance and guest satisfaction are monitored through a Quality Assurance Program and regular audits, with remedial training and on-site visits potentially required for underperforming hotels. Franchisees also benefit from continuous training programs for all associates, managers, and sales professionals, covering brand standards, operational procedures, and system updates. A dedicated food and beverage support program and centralized customer issue resolution services are also provided.
Franchise Requirements
Ideal Candidate Profile
Courtyard by Marriott seeks franchisees who either possess strong managerial and operational experience, skills, capacity, capabilities, and a suitable business philosophy to operate a hotel according to Marriott's standards, or are financially capable and willing to hire an approved management company with such expertise. Candidates must also be 'Qualified Persons,' meaning they must not have been convicted of a Serious Crime, nor be a Competitor or a Restricted Person, and must not have engaged in conduct that could adversely affect the hotel or the brand's reputation. The franchisor evaluates the proposed guarantor's net worth and liquidity as part of the qualification process.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Non-Exclusive
Territory Size Requirements
Courtyard by Marriott typically does not grant franchisees an exclusive territory, and franchisees may face competition from other Marriott-branded hotels or affiliates. If a territory is granted, it will be non-exclusive, applicable only to Courtyard by Marriott hotels, and its duration will be shorter than the full franchise agreement term. The specific size and geographical definition of any granted territory (e.g., a defined radius around the hotel or delineated by specific streets or other geographical boundaries) will depend on the local market. These non-exclusive territories do not grant franchisees the right to develop additional hotels or expand the existing one, nor do they apply to other existing or future Marriott lodging products, including residential components.
Staffing Notes
Courtyard by Marriott requires franchisees to hire a general manager and sales directors/managers at least six to nine months prior to the hotel's opening date. These key personnel must complete pre-opening training and actively prepare the hotel for its launch. The general manager and other managers are mandated to devote their full time to the day-to-day management and operation of the hotel. All employment decisions, including hiring, scheduling, disciplining, and termination, are solely the responsibility of the franchisee or their approved management company, not the franchisor. The franchisor provides a wide range of mandatory and optional training programs for all associates, management, and sales professionals, covering brand standards, ethics, functional operations, and electronic systems.