Salli Farhat has decided to invest in a lodging property, but has come to you for your recommendation for a franchise. She indicates that her desire is to sign with a company whose franchisee fees over a 5-year period are the lowest. Her consultants believe room sales of her rooms-only hotel of 150 rooms would average 70% over the 5-year period. Further, her hotel should be able to command an average daily rate of $50. The concepts she wants you to consider are as follows:

Concept Assumed Reservations Radisson Hotels 15% of total rooms sold Holiday Inn Hotels 18% of total rooms sold Quality Inns 20% of total rooms sold Use the information from Exhibit 16.3 regarding fee structures for the three lodging concepts. Assume each year has 365 days.

Required:

Calculate the total franchise costs over the 5 years for each franchise concept.