FRANCHISING INFORMATION: MALATE PENSIONNE AND GLASSHOUSE

Who are we looking for?

One who has demonstrated at least 5 years of solid and successful entrepreneurial experience

At least a college graduate, preferably with postgraduate degree or units

One who has an untarnished reputation in the community

One who has a passion to operate a hotel and restaurant business

One who will is financially capable to set up and operate a mid-sized hotel and fine dining restaurant business

One who is willing to undergo 1 year of intensive hotel and restaurant training

One who is willing to be a hands-on manager of the franchise establishment

Preferably one who owns an unutilized piece of real estate in a strategic location at a major trade or tourist destination outside of Metro Manila.

HOW MUCH IS IT GOING TO COST?

There are four components of the development of the franchise establishment. These are:

Application Fee
Franchise Fee
Construction and Development Cost
Training and Pre-opening Costs

Application Fee

An application fee of PHP500, 000 will be paid to cover the following:

Feasibility Study
Business Plan
Background checking

This is non-refundable and must be paid before the start of the feasibility study. The studies are to see whether the existing location and the developmental plans will generate a profitable operation. The optimal development alternative will also be cited and the most effective business plan be formulated.

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Franchise Fee

For up to 100 rooms, the fees are as follows:

PHP 3,000,000 (for Malate Pensionne and GlassHouse)
2,500,000 (for Malate Pensionne only)
1,500,000 (GlassHouse only)

If the prospective franchisee wants to have over 100 rooms, an additional fee of PHP 20,000 per room in excess of the 100 rooms will be charged.

The Franchise Fee shall cover the following:

Right to use the Brand/Trade/Service mark
Right to the Intellectual Properties of the Brand
Operations Manual and Training Materials

A schedule of staggered payments will be agreed upon.

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Construction and Development Costs

This will depend on the size and magnitude of the facilities. Estimates for a 50-room hotel and a 100 seating capacity restaurant/kitchen are as follows:

PHP 8 - 10 M for the GlassHouse
PHP 12 M for the Malate Pensionne.

The payments will be on progress billing with a 20% mobilization fee at the start of construction. All contractors and suppliers of materials shall be only the ones accredited by the franchisor.

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Training and Pre-Opening Costs

This amounts to approximately PHP 2, 500, 000 and will cover for the following:

Training Costs (excluding travel and board and lodging)
Marketing and promotions (pre-opening)
Opening Inventory of Stocks and Supplies
Government Permits and Licenses

Before the start of training, PHP 500,000 will be paid to defray for the training costs. All other costs will be on a progress-billing basis.

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WHAT ARE THE PERIODIC FEES?

A flat rate of 10% of total Gross Sales will be charged monthly as Royalty and Marketing fees. This rate will be for facilities with a minimum of 50 rooms. For facilities of between 30 - 49 rooms, 11% of Gross Sales will be charged as Royalty and Marketing fees. For less than 30 rooms, a monthly fee of 12% of Gross Sales will be charged. This will escalate by 1% every 5 years until the end of Franchise Agreement.

A sales commission of 10% shall be charged on reservations that go through the Malate Pensionne Central Reservation system.

HOW LONG WILL THE FRANCHISE AGREEMENT BE EFFECTIVE?

The franchise will be valid for 15 years or until it is revoked for serious infractions of the terms of agreement.

HOW PROFITABLE IS THE FRANCHISE?

One can expect a 30-36 month payback period with both a hotel-restaurant franchise. This payback assumes a bank loan of half the total equity with a 15% interest rate. Internal rate of return (IRR) is at 35%.