]_/ Once you sign the
License Agreement, we will not refimd the Application Fee. If we deny your
application, or if you withdraw the application before we approve or deny it,
we will refund that portion of the Application Fee you paid.
21 You may either purchase or
lease the land on which the Hotel will be built. You need approximately one to two acres depending on hotel
size and usable portion of land.�� If you
872
purchaso tho land, tho
cost should
range from approximately $500 to $10,000 por room We are miahle tn estimate the
cost nf real property acquisition or leasing which will vary substantially depending
nn the location, size, condition, and the market value of the property
involved and also hy peneral economic conditions . If you lease the land, the eest should rongo from approximately $100
to $900 por room per year and tho 874lease must extend
for the term of the License Agreement. The Hotel should be at a location near
an airport, convention center, major highway route, or at another location
providing easy access for a traveler.
3/ This amount includes your
architectural (and structural, mechanical, electrical and plumbing engineering)
fees to adapt MISF''s prototypical plans and'' specifications to site feasibility
report requirements and local code and zoning requirements. This amount does
not include site evaluation fees, geotechnical report fees, or civil
engineering fees. See Note 4 below.
4/ Pre-con struct ion costs
include civil engineering fees entailing early evaluation of site,
environmental characteristics, utility access, zoning regulations, surveys and
plans. Also included are soil testing and analysis, impact, permit and
entitlement fees, and financing costs like feasibility/appraisal report, loan
fees, additional lender costs, construction loan interest accounting, and legal
fees. These costs will vary depending on regional and jurisdictional
requirements and location.
5/ The cost of construction
may vary substantially from location to location. The cost of land, type of
construction, cost of materials, local code requirements and other factors such
as more comprehensive accessibility requirements in some states and or regions.
Cost is also affected by upgrades and enhancements chosen such as: swimming
pool, enlarged breakfast area, meeting rooms, fitness center, guest laundry and
business center and exterior upgrades such as stucco, stone, and brick. The
cost estimates indicated are hard construction costs and include minimal site
improvements, prototypical building design, labor for carpet, paving, minor
landscaping and irrigation, and site lighting.
6/ Furniture, fixture and
equipment costs are based on National Accounts vendor pricing and the approved
interior color board materials as specified in our standards and
specifications. Costs include products for guestroom, guestroom bathroom,
common public areas, laundry area, lobby, front office, workroom, and public
toilet as depicted in our prototypical drawings and standards. Built-in
furniture manufacturing and installation is included. Also included are costs
for all required computer equipment and software to access the CRS, the PMS and
a telephone system which meets specifications. Shipping costs are not included
as they vary with your location.
7/ Before construction begins
you must obtain and maintain at all times, at your expense, specific types and
amounts of insurance. See Item 8 below and Paragraph 7 of the License Agreement
for details. Insurance premiums vary widely by reason of location, size of hotel
and type of coverage purchased and cannot be accurately estimated.
8/ Before your Hotel opens to
the public, you must fulfill certain training requirements. See Item 11 below
and Paragraphs 3A(6) and 4A of the License Agreement for details.
9/ These expenses are
discretionary, but strongly recommended, and include pre-opening direct mail,
signages, pre-opening parties, media advertising, and bill board costs.
10/ You must participate in
our CRS, which we have the right to renovate over time. You must pay for your
connection to the wide area network for Microtel. Costs for the wide area
network vary by location but ^recurrently range876 between
$150 and $4808775QQ878''per month. This network is used
for connectivity to both the reservation system and to enable for High Speed
Internet access.
11/����
These expenses include items such as towels, linens, cleaning supplies and
paper goods.
12/���� You must have one free
standing exterior sign which conforms to our specifications and complies
������������������������������������������������������������������������������������������������������������������������������������������ 879
880
with local laws. Costs
indicated are based on approved vendor supplier pricing. Shipping
costs are not included.
13/ We
recommend that a formula of $500 to $750 per room be calculated for Kinds
needed to operate the Hotel per month for the initial three-month period. We
based this estimate on our management''s experience with operating multiple
lodging franchise programs and experience with the Microtel brand. You should
review these figures carefully with a business advisor before purchasing the
franchise. This item does not include Royalty Fees and Marketing/Reservation
Contributions which will be based on your revenue and, as described below, we
cannot estimate the cost of any financing interest or amount of any debt
service obligation. These funds include payroll (but not a draw or salary for
your principals) and taxes, but do not include provisions for any necessary
repairs and replacements needed to maintain the Hotel in a high degree of
repair consistent with the Hotel System standards. No earnings claims should be
implied. These figures are estimates and we cannot guarantee that you will not
have additional expenses. Your costs will depend on factors such as: how much
you follow our methods and procedures; your management skill, experience and
business acumen; local economic conditions; the local market for your Hotel;
prevailing wage rates; competition; and the sales level reached during the
initial period.
881
14/ The figure in the chart
does not include the costs for real property. Tho figures in tho Leasing or purchase costs vary
widely and depend on geographic location. sizeT
visibility, local rental states, other businesses in the areaT other local economic
conditions, the site''s market potential and Other factors. Because of these factors, this table
does not estimate the costs fur the Hotel''s purchase price for the huildinp or land on which
the Hotel is located (if you decide to huy, rather than lease, the land
and/or premises). Estimated costs for rental fees or security deposits are also included. The fipures in
this chart are_ for a Microtel Inn &
Suites-are based on our prototypical plans and specifications for the Suite
configurations and on information provided by suppliers, contractors and other
vendors who would typically be involved in the construction and furnishing of
the Hotel. You should assume 100 guest rooms.
ggg -------------------------------------------------------------------------------------------- ......... �����
, -. ----- . ■ ................
We have not previously built or operated a Microtel
Inn & Suites.�� Financing (and its availability) for these items is
discussed in Item 10.
---------- The-refimdability
of the Application Fee-is-disoussed in Note
1- above.�� Note;��� You must ask
your suppliers if any costs
of the-88 goods or services described above are refundable.
