Le Meridien Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$84,358,740 - $138,214,140
Franchise Fee
$100,000
Total US Locations
24
Business Summary
Le Méridien operates full-service hotels and resorts that cater to discriminating business and leisure travelers. These hotels typically range in size from approximately 100 to 725 guestrooms. Le Méridien provides a variety of food and beverage options, such as restaurants, lounges, room service, and catering, along with meeting rooms, ballrooms, and business, recreational, and fitness centers. The brand offers franchisees a non-exclusive license to use its established system for developing and operating a Le Méridien hotel, which includes access to trademarks, design criteria, quality and service standards, training programs, marketing initiatives, a reservation system, a property management system, a revenue management system, and a quality assurance program. Franchisees also have the option to operate an Explore Spa within their hotel, which is not an independently franchised unit.
Corporate History
MIF, L.L.C., the franchisor for Le Méridien Hotels, was established in Delaware in 2012 and operates as a subsidiary of Marriott International, Inc. Le Méridien Hotels are full-service establishments designed for discerning business and leisure travelers. While MIF, L.L.C. has offered Le Méridien franchises since March 2017, the brand's history within the broader Marriott system dates back to 2005, when Marriott affiliates began owning, managing, and franchising Le Méridien Hotels. In 2024, MIF, L.L.C. acquired and relicensed six franchise agreements from Marriott and its wholly owned subsidiary and also entered into several new franchise agreements.
Financial Overview
Investment Range
$84,358,740 - $138,214,140
Franchise Fee (Low)
$100,000
Franchise Fee (High)
$382,250
Royalty %
5%
Marketing %
1%
Equipment Costs (Low)
$10,325,000
Equipment Costs (High)
$15,075,000
Working Capital
$1,437,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
MIF, L.L.C. is an LLC, so its income and losses are passed through to its sole member, Marriott International, Inc., meaning no federal or state income tax provision is reported on its financial statements. The company generates revenue primarily from franchise and licensing fees. It capitalizes costs related to obtaining franchise and license agreements, which are then amortized over the contract's term. As of 2024, MIF, L.L.C. had a significant amount of $443,571,000 due from related parties, mainly from transactions with its parent company, Marriott International, Inc., with these balances classified as non-current and accruing interest. The company's financial statements include allocated corporate administrative service costs from Marriott, which have a 1% markup. MIF, L.L.C. pays royalties for the Marriott franchise system, calculated at 2% of the underlying properties' gross room and food/beverage revenue. The company has shown consistent net income, reporting $63,830,000 in 2024, $64,157,000 in 2023, and $53,570,000 in 2022. The independent auditors have issued an unqualified opinion, and there have been no impairment charges recorded, indicating a stable financial position.
Financing Details
Le Méridien generally does not offer direct or indirect financing for its franchised hotels, nor does it guarantee any franchisee loans or obligations. However, in specific, limited circumstances and at its sole discretion, Le Méridien may provide credit support. This could take the form of a contingent guaranty for a portion of a loan obtained from a third-party lender, or Le Méridien might issue a mezzanine loan directly. The decision to offer such financing depends on several factors, including market penetration opportunities, the size and location of the proposed hotel, current economic and financial conditions, the cost a franchisee would incur to develop or convert the hotel, the franchisee's commitment to expanding the system, and whether the franchisee meets Le Méridien's current criteria. The exact terms and conditions for any loan guaranty or mezzanine loan, such as the amount, interest rates, repayment structure, fees, security interests, and requirements for a personal guaranty, would vary based on the unique circumstances of each transaction. Sample financing agreements are provided for reference, but the final documents will be tailored to the specific lender and loan terms.
Performance Metrics
Total US Locations
24
Franchised Units
24
Corporate Units
0
Avg Square Footage
180,000
Franchising Since
2005
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
17
Litigation Summary
Le Méridien has a notable legal history, including numerous ongoing and recently resolved cases. Following two significant data security incidents in November 2018 and February 2020, Marriott (the franchisor's parent company) faced extensive class action lawsuits and regulatory investigations. The primary consumer lawsuit, In re Marriott International Customer Data Security Breach Litigation (MDL), filed in 2019, is currently ongoing and is on appeal regarding class certification. The City of Chicago also filed a separate lawsuit against Marriott in 2019 related to the data breach, which is ongoing with a trial date set for November 2025. Additionally, administrative investigations related to the data breaches were conducted by U.S. authorities (resolved in 2024 with a $52 million payment), the U.K. (penalty paid in 2020), Canadian authorities (inquiry closed in 2023), and an ongoing enforceable undertaking with an Australian authority until 2027. A Turkish authority imposed a fine in 2019 that Marriott is currently appealing. Multiple Canadian class action lawsuits from 2018 were consolidated into a single case, with appeals regarding the tort of intrusion upon seclusion resolved in 2023. A class action regarding the 2020 Property System Incident (Rahman v. Marriott) was filed in 2020 and settled/dismissed in 2021. Marriott has also faced investigations and litigation concerning the display of resort and destination fees. The District of Columbia filed a lawsuit in 2019, which is ongoing with a trial date in November 2025. Earlier individual class actions in Puerto Rico (Jamil Rivera, Robert Puleo) from 2019 regarding resort fees were settled, and a California class action (Todd Hall) from 2019 was settled and dismissed in July 2024. In terms of franchisor-initiated litigation, Marriott filed an arbitration against Arkansas Knoxville Hotel, LP in August 2023 for unpaid fees, which settled in April 2024. Marriott also filed an arbitration demand against Lucky Cleveland Holdings LLC in September 2024 for unpaid fees after termination, resulting in a $1.95 million award in December 2024. A breach of contract claim against Pride Hotel, LLC in August 2024 regarding a franchisee housing migrants instead of opening hotels was settled shortly after filing. Other pending actions include two putative class action lawsuits (Portillo v. CoSTAR Group and Segal v. Amadeus IT Group), filed in February and March 2024 respectively, alleging unlawful information sharing and price-fixing. Both have pending motions to dismiss. A civil suit (Hall v. Marriott) filed in North Carolina in January 2022 alleging negligence resulted in a $16 million jury verdict against Marriott and others in October 2024, which is currently on appeal. Concluded actions include an arbitration (HPT CY TRS v. Marriott) from 2020 that issued a decision in January 2022, and a 2016 lawsuit (Cityfront Hotel Associates v. Starwood/Marriott) seeking to enjoin a merger, which was dismissed in 2017 after a confidential settlement.
Bankruptcy History
Le Méridien has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Le Méridien 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.
Training & Support Program
Franchisor Assistance
Before a Le Méridien hotel opens, the franchisor provides design and construction criteria, reviews plans for compliance with brand standards, conducts periodic compliance assessments during construction, offers input for procuring operating supplies and furniture/fixtures/equipment, and performs a final inspection for readiness. It also provides training tools and programs for hotel staff, including general managers and management teams, and makes operational standards and resources available electronically. For hotels with residential or condominium components, Le Méridien reviews governance documents and sales/marketing materials. After opening, Le Méridien offers ongoing support through representatives available for consultation on hotel design and operation and provides electronic systems such as the reservation system, property management system, yield management system, sales and catering system, with ongoing support covered by the Program Services Contribution. The franchisor ensures full participation in its Quality Assurance Program, directs Marketing Fund activities for advertising and promotion, and manages mandatory participation in the Global Sales Organization. Ongoing training programs, covered by a 'learning and development bundle' fee, are also provided for personnel, alongside inspections and audits to ensure compliance with evolving brand standards and IT infrastructure support.
Initial Training Hours
113
Training Location
Various locations (including web-based)
Ongoing Support
After opening, Le Méridien provides extensive ongoing support services to its franchisees. This includes access to representatives for consultation on hotel design and day-to-day operations. The franchisor offers and supports various electronic systems vital for hotel management, such as the reservation system, property management system, yield management system, and sales and catering system, with maintenance and upgrades being mandatory. Franchisees are required to participate fully in the Quality Assurance Program, which includes annual audits, and may be mandated to join improvement programs and supplemental training if their hotel falls into a 'Red Zone' for quality. Le Méridien directs Marketing Fund activities, funding ongoing brand communication, advertising, and the development and maintenance of brand websites and mobile applications. Franchisees must also participate in the Global Sales Organization. Ongoing training programs for hotel personnel are provided and covered by a 'learning and development bundle' fee. Additionally, Le Méridien conducts regular inspections and financial audits to ensure compliance with brand standards and provides centralized IT infrastructure support and server management for systems connected to its network.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Semi-Absentee
Territory Type
Non-Exclusive
Territory Size Requirements
Le Méridien franchisees are generally not granted an exclusive territory. If a territory is provided, it will be non-exclusive and will apply only to Le Méridien hotels for a duration of five years or less. This territory will not offer protection against competition from existing hotels, hotels currently under development, or groups of hotels acquired by Marriott or its affiliates. Furthermore, it will not apply to any residential or condominium products or other lodging offerings developed by Le Méridien or its affiliates. If a non-exclusive territory is granted, its specific geographic area and boundaries, whether defined by a radius around the hotel or by streets and other geographical markers, will depend on the market location. This grant does not include any implicit or explicit rights for the franchisee to develop additional hotels or expand the current hotel within that territory.
Staffing Notes
Le Méridien requires that all its hotels be staffed with adequately qualified individuals. The franchisor mandates that a general manager, who has successfully completed its training program, must directly supervise the hotel on-premises and dedicate full-time hours to its management. Other managers are also required to commit full-time to the hotel's operation and management. It is important to note that all hotel employees are considered solely the employees of the franchisee or its designated management company, and not of Le Méridien. Furthermore, any hotel personnel who access Guest Personal Data must complete mandatory training. To ensure safety, the hotel's security policy must incorporate associate alert devices equipped with geolocation capabilities, which are to be provided to all staff members who regularly interact with guests in enclosed areas.