The Luxury Collection Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$154,995,890 - $251,805,390
Franchise Fee
$100,000
Total US Locations
17
Business Summary
The Luxury Collection operates full-service hotels, resorts, and suites that serve both business and leisure travelers. These hotels can be newly built, conversions of existing hotels, or historic buildings repurposed for lodging. A key characteristic of The Luxury Collection is the individuality of its offerings, with hotels varying in size and providing amenities and services appropriate to their location and tier. Some locations offer boutique experiences, while others provide extensive catering, meeting rooms, business centers, recreational facilities, and diverse food and beverage options. Each hotel within The Luxury Collection system retains or creates its own name, logo, and brand concept alongside its designation as a member of The Luxury Collection.
Corporate History
MIF, L.L.C. was established as a Delaware limited liability company in 2012 and serves as the franchisor. Its parent company is Marriott International, Inc. The Luxury Collection hotels, resorts, and suites are full-service hotels designed for business and leisure travelers, allowing each hotel to maintain its unique identity while operating under The Luxury Collection brand. MIF, L.L.C. began offering franchises for The Luxury Collection Hotels in March 2017. Prior to this, its affiliates had owned and managed these hotels since 1998 and also offered franchises for them between 1998 and March 2017.
Financial Overview
Investment Range
$154,995,890 - $251,805,390
Franchise Fee (Low)
$100,000
Franchise Fee (High)
$150,000
Royalty %
5%
Marketing %
1%
Equipment Costs (Low)
$143,780,000
Equipment Costs (High)
$233,660,000
Working Capital
$1,150,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
MIF, L.L.C. has received an unqualified opinion from its independent auditors for its financial statements for the fiscal years ending December 31, 2024, 2023, and 2022. The company's total assets and member's equity have increased year over year, with total assets reaching $477,080 thousand in 2024. Net income for MIF, L.L.C. was $63,830 thousand in 2024, slightly down from $64,157 thousand in 2023. The company does not hold a cash balance directly, with transactions primarily recorded through related party receivable and payable accounts. The auditors found no conditions or events that would raise substantial doubt about the company's ability to continue as a going concern, indicating a stable financial position. The company's related party transactions are significant and earn interest.
Financing Details
The Luxury Collection does not generally offer direct or indirect financing to its franchisees, nor does it guarantee loans or other obligations. However, under very limited and discretionary circumstances, The Luxury Collection may provide credit support in the form of a contingent guarantee for a portion of a loan from a third-party lender or may offer a mezzanine loan. The specific terms and conditions for such guarantees or mezzanine loans are not standardized and would vary based on individual circumstances. Franchisees would be required to sign various documents, such as a Credit Enhancement Commitment Letter, Reimbursement Agreement, Equity Pledge, and Guaranty, with the terms being determined at the time of loan origination. The Luxury Collection retains the right to sell or assign any interest it holds in such financing.
Performance Metrics
Total US Locations
17
Franchised Units
12
Corporate Units
5
Avg Square Footage
234,500
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
16
Litigation Summary
The Luxury Collection has been involved in several litigation and administrative matters. Significant cases include numerous class actions and individual lawsuits, consolidated into an MDL (Multi-District Litigation), alleging negligence and violations of consumer protection and data privacy laws stemming from a 2018 data security incident. This MDL is ongoing, with an appeal heard in November 2024 regarding class certification. The City of Chicago also filed a consumer protection lawsuit related to the data incident in 2019, with a trial set for November 2025. Additionally, Marriott has faced administrative investigations by regulatory authorities in the U.S., Canada, Australia, and Turkey concerning data security. U.S. investigations settled in October 2024 for $52 million. A £18.4 million penalty from the UK's ICO was paid in 2020. The Turkish KVKK imposed a fine in 2019, which Marriott is currently appealing, with a retrial ordered in December 2023. The Australian OAIC issued an enforceable undertaking in December 2022, requiring assessments by December 2025. Another set of cases involved industry-wide investigations into resort fees, which led to settlements with several state Attorneys General. Marriott initiated several arbitration and legal claims against franchisees for unpaid fees and breaches of contract in 2023 and 2024, with some cases resulting in settlements or awards to Marriott. Other pending class actions, filed in 2024, allege antitrust violations and price-fixing related to the use of market data at luxury hotels. A civil suit from January 2022 alleging negligence resulted in a $16 million jury verdict against a franchisee and Marriott in October 2024, which is currently under appeal. Several other concluded actions include class actions regarding resort fees and data incidents that were dismissed or settled between 2017 and 2024.
Bankruptcy History
The Luxury Collection has no bankruptcy history to report. No bankruptcy is required to be disclosed in this disclosure document for MIF, L.L.C. or its affiliates.
Agreement Terms
Initial Term
20 years
Renewal Conditions
The Luxury Collection franchise agreement is not renewable. Franchisees should not expect to be granted any right to operate the hotel under The Luxury Collection brand after the expiration of the initial term. After the term expires, The Luxury Collection may, at its sole discretion, agree to a new franchise agreement, but this new agreement could have significantly different terms and conditions, including different fees and duration.
Training & Support Program
Franchisor Assistance
The Luxury Collection provides comprehensive assistance to its franchisees, starting with pre-opening support. This includes providing product quality standards, reviewing construction drawings and plans for compliance, and conducting periodic compliance assessments during construction. Franchisees also receive input for procuring supplies, furniture, fixtures, and equipment, and a final hotel inspection to ensure readiness. The Luxury Collection offers staff training tools, general manager and management team training, and access to manuals and procedures. If a hotel involves residential or condominium units, The Luxury Collection will review related documents. Post-opening assistance includes consulting with representatives on hotel design and operation, access to a reservation system, and protection of proprietary marks. The Luxury Collection maintains and makes standards available, offers ongoing training programs, and facilitates a franchisee association. It also directs Marketing Fund activities and reviews plans for upgrading or remodeling hotels. For sales and marketing, The Luxury Collection administers a Marketing Fund for advertising, promotions, and research, and operates various sales organizations (Global Sales, Area Sales, Group Sales, International Sales, Field Sales) to generate leads. Franchisees must also maintain a portfolio of professional photographs of their hotel.
Initial Training Hours
112
Training Location
Franchisor-designated locations and online
Ongoing Support
After opening, The Luxury Collection provides extensive ongoing support. Franchisees can consult with representatives on hotel design and operation and access The Luxury Collection's reservation system. The franchisor actively protects its proprietary marks and makes operational standards available to franchisees. Ongoing training programs for management personnel are offered, and a franchisee association is provided for collaboration. The Luxury Collection directs the activities of its Marketing Fund for advertising, sales, marketing, and promotions across various channels including broadcast, digital, and print media. It also manages several sales organizations, such as Global Sales, Area Sales, Group Sales, International Sales, and Field Sales, which provide lead generation and support services. Technology support is comprehensive, covering property management, sales and catering, guest experience platforms, point-of-sale systems, reservation and yield management systems, network infrastructure, digital guest and food & beverage services, lock systems, mobile device management, guestroom entertainment, and various administrative software like MGS/MDash and MESH for sustainability. Additional programs include credit card processing, server management, audit programs, quality assurance initiatives, food safety re-assessments, fire protection audits, and customer issue resolution services. Ongoing training is provided through a 'Learning & Development Bundle,' and franchisees attend conferences. For hotels with residential components, specific software licenses and annual assessments are also part of ongoing support.
Franchise Requirements
Ideal Candidate Profile
The Luxury Collection seeks franchisees who can operate full-service hotels that cater to both business and leisure travelers, maintaining a high standard of individuality in offerings. Ideal candidates demonstrate strong managerial and operational experience, skills, capacity, and a philosophy that aligns with operating a Luxury Collection hotel according to its standards and franchise agreement. While a solid background is preferred, The Luxury Collection does offer introductory training programs like the Franchisee Introduction to Marriott (FITM) for those who may lack specific experience or familiarity with the system, or Franchisee OnBoarding for New Development (FOND) for those new to the system. Franchisees who are committed to actively growing the system may also qualify for certain incentives.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
supervisory
Territory Type
non-exclusive
Territory Size Requirements
The Luxury Collection franchisees are typically not granted an exclusive territory. The franchise agreement permits the operation of one hotel at a specific approved site. While a non-exclusive territory may be granted, it would apply only to The Luxury Collection hotels for five years or less, and would not apply to existing or under-development hotels, chain acquisitions, or other lodging products developed by Marriott or its affiliates (including residential components). If granted, a territory's size and geographic area depend on the market and may be defined as a radius around the hotel or by geographical boundaries like streets or highways. This does not grant rights to develop additional hotels or enlarge the approved hotel.
Staffing Notes
The Luxury Collection requires that a general manager who has successfully completed their training program must directly supervise the hotel's operations on-premises. The general manager and other key managers are expected to dedicate their full-time efforts to the management and operation of the hotel. All employment decisions at the hotel are the sole responsibility of the franchisee or their approved management company, as The Luxury Collection does not control these policies. Franchisees or their management companies must promptly notify The Luxury Collection when hiring a new general manager. Training programs are mandated for various roles, including hourly associates, management-level associates, general managers, and culinary staff, covering areas such as brand and service, ethics, functional operations, electronic systems, leadership development, and loyalty programs. Third-party training is also required for alcohol awareness and food safety certifications for relevant personnel.