Starting an OYO franchise in 2024 can be an attractive business opportunity, given the increasing demand for affordable and quality accommodation. OYO Rooms is one of the largest hotel chains in India and operates on a franchise model, allowing entrepreneurs to partner with them. Here’s a comprehensive overview of the costs, potential profits, and the application process to start an OYO franchise.

1. OYO Franchise Cost

• Franchise Fee: The franchise fee for OYO typically ranges from ₹2-5 Lakhs, depending on the type of property and location.
• Total Investment: The total investment required can range from ₹10-30 Lakhs, which includes:
  • Franchise fee
  • Renovation and setup costs (interiors, furnishings, and branding)
  • Initial operating expenses (staff salaries, utilities, etc.)
• Property Requirement: OYO typically partners with existing hotels or properties, and the minimum property size may vary based on location and hotel classification (budget, premium, etc.).

2. Potential Profit and ROI

• Revenue Model: OYO franchisees earn revenue through room bookings, with OYO taking a percentage of the sales. The commission structure may range from 15% to 25%.
• Monthly Revenue: The monthly revenue for OYO franchisees can vary widely but may range from ₹2-8 Lakhs, depending on location, occupancy rates, and property type.
• Occupancy Rates: Successful OYO properties often maintain occupancy rates of 60-80%, which significantly impacts profitability.
• Break-even Period: Most franchisees can expect to break even within 1-2 years, depending on how well they manage operations and marketing.
• Annual Profit: After deducting operating costs, a well-performing OYO property can expect an annual profit margin of around 15-25%.

3. How to Apply for an OYO Franchise

Here’s a step-by-step guide to apply for an OYO franchise:

• Research and Preparation: Understand the hospitality market, OYO’s business model, and the specific requirements for franchisees.
• Visit the OYO Website: Go to the OYO official website and navigate to the “Franchise” section.
• Fill Out the Inquiry Form: Provide necessary details like personal information, property details, investment capacity, and preferred location.
• Initial Evaluation: OYO’s franchise team will review your application and conduct an assessment of your property.
• Franchise Agreement: Once approved, you will receive a franchise agreement detailing the terms, conditions, and revenue-sharing model.
• Property Setup and Training: OYO provides support for property setup and staff training, focusing on service standards and operations.
• Launch: After training and setup, you can officially launch your OYO property and start accepting bookings.

4. Benefits of an OYO Franchise

• Brand Recognition: OYO is a widely recognized brand, attracting customers looking for affordable accommodation options.
• Comprehensive Support: Franchisees receive support in areas like marketing, technology integration, and operational training.
• Dynamic Pricing and Technology: OYO’s technology-driven approach allows franchisees to optimize pricing and maximize occupancy rates.
• Growing Market: The hospitality sector in India is expanding, creating opportunities for budget accommodations.

Summary

Starting an OYO franchise in 2024 requires an investment of approximately ₹10-30 Lakhs, with significant potential for monthly revenue and profitability within 1-2 years. The combination of brand strength, operational support, and a growing market makes OYO a compelling choice for entrepreneurs looking to enter the hospitality sector.