Franchise Deep Dive: Tru by Hilton Franchise Costs, Fees, Profit

Brand overview

Tru by Hilton is a hotel brand in the mid-scale lodging market, tailored to younger, modern travelers who seek a balance of affordability, quality and contemporary amenities. Tru by Hilton focuses on offering guests a streamlined and consistent experience.

Tru by Hilton was launched in 2016 to compete with brands like Comfort Inn and La Quinta. It is part of Hilton Worldwide's diverse portfolio, which also includes Hilton Garden Inn, Hampton by Hilton and Embassy Suites by Hilton.

As of September 2024, there are 293 Tru by Hilton locations in the U.S., Canada, Chile, Colombia, Mexico and Brazil.

Tru by Hilton operates with a business model focused on providing modern travelers with a value-driven and straightforward experience. Targeting millennial guests, the brand emphasizes contemporary designs, technology integration and affordability. The hotels typically feature limited food and beverage options, vibrant social areas, and an overall atmosphere that is fun and engaging, appealing to those who want to socialize or work in a dynamic environment.

Tru by Hilton’s properties are designed to be smaller, cost-efficient, and easily scalable, allowing the brand to adapt to both urban and suburban locations. The brand's design choices, including bright colors and open lobby spaces, enhance its appeal to a younger demographic.

Consistency is key across all Tru by Hilton locations, ensuring that guests receive the same level of service and amenities no matter where they stay, mirroring the reliability seen in other Hilton brands. This approach helps maintain brand loyalty and ensures a predictable experience for travelers.

Financial performance

In its 2024 Franchise Disclosure Document (FDD), Tru by Hilton doesn’t share exactly how much its franchise owners make. However, it does disclose the following data:

• The average room rate in 2023 was $128.44. Of the 211 franchisee-managed hotels in operation at the time, 92 (43.6%) met or exceeded this average.

• The average room occupancy in 2023 was 71.2%. Of the 211 franchisee-managed hotels in operation at the time, 115 (54.5%) met or exceeded this average.

Investment costs

The investment range to open a Tru by Hilton franchise is $12,763,888 to $18,595,223. Below is a breakdown of the associated costs:

• Franchise Application Fee: $100,000 - $150,000

• Property Improvement Plan: $0 - $10,000

• Construction and Leasehold Improvements: $8,975,214 - $12,964,198

• Designer and Engineering Fees: $359,009 - $518,568

• Furniture, Fixtures and Equipment: $1,313,535 - $1,866,603

• Inventory and Operating Equipment: $110,000 - $275,000

• Signage: $27,500 - $75,000

• Computer Hardware and Software Systems: $31,035 - $90,735

• Guest Internet Access System: $56,600 - $87,000

• Connected Room System: $24,190 - $28,910

• Delphi Sales and Events System: $1,900 - $33,000

• Required Pre-Opening Training: $5,000 - $17,500

• ADA Consultant Fee: $2,500 - $10,000

• Construction/Renovation Extension Fees: $0 - $10,000

• Organization Expense: $50,000 - $122,900

• Permits and Licenses: $134,628 - $194,463

• Miscellaneous Pre-Opening and Project Management Expenses: $269,256 - $388,926

• Contingencies: $897,521 - $1,296,420

• Additional Funds: $400,000 - $500,000

• Other Required Pre-opening Services Fees: $6,000

Tru by Hilton charges a franchise application fee of $100,000 to $150,000, depending on whether the hotel in question is newly constructed or changing ownership. This fee is due when the application is submitted and is non-refundable unless the applicant is rejected or withdraws the application prior to approval.

• Christopher J. Nassetta — Chief Executive Officer and President

• Kevin J. Jacobs — Chief Financial Officer and Executive Vice President

• Anne-Marie D’Angelo — Chief Legal Officer and Executive Vice Presidentl

• Christopher Silcock — President, Global Brands and Commercial Services

• Bill Duncan — Senior Vice President and Global Head of Focused Service and All Suites Brands

• Dianna Vaughan — Senior Vice President Brand Management, Americas

• Andrew Harp — Vice President and Brand Leader – Tru by Hilton

• Jonathan Wingo — Vice President and Global Head of Residential Programs

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