Business models / Hotel / Motel Business / Own a franchise

A hotel / motel business franchise, or your own?

21 franchise brands run a hotel / motel business. Here they are beside the independent version of the same business, with each brand’s fees as it publishes them and worked out in dollars. A brand can bring customers an independent has to earn one by one. The question is whether it brings in more than it costs.

Typical for a hotel / motel business: $500k to $5M in sales, and the owner keeps 22% to 32% after paying for its own marketing. Change either to your own numbers.

How the two sides are counted

  • Sales. A brand’s name brings customers an independent wins one at a time, so each brand is worked out at the sales it reports where we have them, and at yours where we don’t.
  • Marketing. On your own you pay for all of it, about 3% of sales here (the SBA’s usual range for ongoing marketing). The ad fund does part of that job, so it is counted once, not twice.
  • Survival. New franchised businesses were about 5 to 6 points more likely to make it through their first two years in Census data, and about half of all new businesses close within five years. It is not in the dollars; each brand’s details give the sources.
The independent version

Your own hotel / motel business

Built and run under your own name

Cost to open
$1.4M to $5.1M
Annual sales
$1.6Mtypical
Franchise fee
None
Royalty + ad fund
Noneall marketing is yours
$426,600
The owner keeps in a year, after about $47k of marketing
Taking new owners

Econo Lodge

Economy hotel, conversion brand

Total investment
$186k to $1M
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
5% + 4% of sales
$332k
The owner keeps in a year at $1.6M in sales (your sales), after $142k to the brand
$95k less a year than on your own
Taking new owners

Travelodge by Wyndham

Economy hotel, roadside

Total investment
$232k to $11M
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
5% + 2% of sales
$348k
The owner keeps in a year at $1.6M in sales (your sales), after $111k to the brand
$79k less a year than on your own
Taking new owners

Baymont by Wyndham

Midscale hotel, conversion friendly

Total investment
$232k to $11M
Avg. annual sales
Ask the brand
Franchise fee
$26k
Royalty + ad fund
5% + 3.5% of sales
$340k
The owner keeps in a year at $1.6M in sales (your sales), after $134k to the brand
$87k less a year than on your own
Taking new owners

Ramada by Wyndham

Midscale hotel, full or select service

Total investment
$238k to $25M
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
5% + 2% of sales
$348k
The owner keeps in a year at $1.6M in sales (your sales), after $111k to the brand
$79k less a year than on your own
Taking new owners

AmericInn by Wyndham

Midscale hotel, Midwest

Total investment
$308k to $11M
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
5% + 2% of sales
$348k
The owner keeps in a year at $1.6M in sales (your sales), after $111k to the brand
$79k less a year than on your own
Taking new owners

Quality Inn

Midscale hotel, conversion brand

Total investment
$317k to $2M
Avg. annual sales
Ask the brand
Franchise fee
$45k
Royalty + ad fund
5% + 4% of sales
$332k
The owner keeps in a year at $1.6M in sales (your sales), after $142k to the brand
$95k less a year than on your own
Taking new owners

Howard Johnson by Wyndham

Economy hotel, family travel

Total investment
$350k to $12M
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
5% + 2% of sales
$348k
The owner keeps in a year at $1.6M in sales (your sales), after $111k to the brand
$79k less a year than on your own
Taking new owners

Wingate by Wyndham

Upper-midscale hotel, business travel

Total investment
$407k to $16M
Avg. annual sales
Ask the brand
Franchise fee
$36k
Royalty + ad fund
5.5% + 3% of sales
$340k
The owner keeps in a year at $1.6M in sales (your sales), after $134k to the brand
$87k less a year than on your own
Taking new owners

Americas Best Value Inn

Economy hotel, flat fee model

Total investment
$3.5M to $7.7M
Avg. annual sales
Ask the brand
Franchise fee
$18k
Royalty + ad fund
In the details
The fee is not a simple share of sales, so it is not worked out in dollars. The details show it as the brand words it.
Taking new owners

Super 8

Economy hotel

Total investment
$4.6M to $6.1M
Avg. annual sales
Ask the brand
Franchise fee
$25k
Royalty + ad fund
5.5% + 3% of sales
$340k
The owner keeps in a year at $1.6M in sales (your sales), after $134k to the brand
$87k less a year than on your own
Taking new owners

Motel 6

Economy motel

Total investment
$6.3M to $8.2M
Avg. annual sales
Ask the brand
Franchise fee
$41k
Royalty + ad fund
5% + 3% of sales
$348k
The owner keeps in a year at $1.6M in sales (your sales), after $126k to the brand
$79k less a year than on your own
Taking new owners

Red Roof

Economy hotel

Total investment
$7.3M to $8.9M
Avg. annual sales
Ask the brand
Franchise fee
$30k
Royalty + ad fund
5% + 4% of sales
$332k
The owner keeps in a year at $1.6M in sales (your sales), after $142k to the brand
$95k less a year than on your own
Taking new owners

Microtel by Wyndham

Economy hotel, new build

Total investment
$7.5M to $9.6M
Avg. annual sales
Ask the brand
Franchise fee
$40k
Royalty + ad fund
6% + 2% of sales
$332k
The owner keeps in a year at $1.6M in sales (your sales), after $126k to the brand
$95k less a year than on your own
Taking new owners

Days Inn by Wyndham

Economy hotel

Total investment
$7.6M to $9.4M
Avg. annual sales
Ask the brand
Franchise fee
$35k
Royalty + ad fund
6% + 4% of sales
$316k
The owner keeps in a year at $1.6M in sales (your sales), after $158k to the brand
$111k less a year than on your own
Taking new owners

Comfort Inn

Upper-midscale hotel (Choice Hotels)

Total investment
$8.8M to $11M
Avg. annual sales
Ask the brand
Franchise fee
$50k
Royalty + ad fund
6% + 3.5% of sales
$324k
The owner keeps in a year at $1.6M in sales (your sales), after $150k to the brand
$103k less a year than on your own
Taking new owners

avid hotels

Midscale hotel, IHG

Total investment
$10M to $16M
Avg. annual sales
Ask the brand
Franchise fee
$50k
Royalty + ad fund
5% of sales
$348k
The owner keeps in a year at $1.6M in sales (your sales), after $79k to the brand
$79k less a year than on your own
Taking new owners

La Quinta by Wyndham

Midscale hotel

Total investment
$13M to $16M
Avg. annual sales
Ask the brand
Franchise fee
$61k
Royalty + ad fund
5.5% to 6% + 3.5% of sales
$324k to $332k
The owner keeps in a year at $1.6M in sales (your sales), after $142k to $150k to the brand
$95k to $103k less a year than on your own
Taking new owners

Holiday Inn Express

Upper-midscale hotel, IHG

Total investment
$14M to $21M
Avg. annual sales
Ask the brand
Franchise fee
$75k
Royalty + ad fund
6% of sales
$332k
The owner keeps in a year at $1.6M in sales (your sales), after $95k to the brand
$95k less a year than on your own
Taking new owners

Tru by Hilton

Midscale hotel, Hilton

Total investment
$14M to $21M
Avg. annual sales
Ask the brand
Franchise fee
$100k
Royalty + ad fund
5.5% + 4% of sales
$324k
The owner keeps in a year at $1.6M in sales (your sales), after $150k to the brand
$103k less a year than on your own
Taking new owners

Candlewood Suites

Extended-stay hotel, IHG

Total investment
$15M to $23M
Avg. annual sales
Ask the brand
Franchise fee
$60k
Royalty + ad fund
5.5% of sales
$340k
The owner keeps in a year at $1.6M in sales (your sales), after $87k to the brand
$87k less a year than on your own
Taking new owners

Hampton by Hilton

Upper-midscale hotel, Hilton

Total investment
$17M to $29M
Avg. annual sales
Ask the brand
Franchise fee
$100k
Royalty + ad fund
6% + 4% of sales
$316k
The owner keeps in a year at $1.6M in sales (your sales), after $158k to the brand
$111k less a year than on your own
Free account

See all 21 hotel / motel business brands side by side

  • Every brand’s investment and fees, and what the owner keeps against running your own
  • The yearly sales the first 3 report, and a plus to add brands to your comparison and benchmark them in your account
  • Members see the sales every franchisor reports, for every brand

Free, no card. A new account accepts the Terms and the Privacy Policy. smbnest is a self-assessment tool and never takes a cut of your deal or a fee from a franchisor.

Before you sign: what to read in the disclosure document

Every franchisor must give you its Franchise Disclosure Document at least 14 days before you sign or pay. These are the parts that answer the questions above.

  • Items 5 to 7, the fees and the investment. The franchise fee, every other fee (technology, training, transfer, renewal), and the full opening budget, including working capital.
  • Item 19, what owners earn. Whether the brand states owner sales or earnings at all, and for which units. Put its figures in the boxes above in place of the typical ones.
  • Item 20, units opened, closed and sold. How many owners left in each of the last three years, and a list of current and former owners you can call.
  • Item 12, the territory. Whether you get a protected area, and what the brand can open or sell inside it.
  • Item 21, the franchisor’s own finances. Whether the company behind the brand is in good health.

smbnest is a self-assessment tool, not individualized advice. Fees are as each brand publishes them on its franchising page and in its disclosure document, reviewed in the month shown, and change; the figures in dollars are worked out at the sales you enter and are not a forecast. We never take a cut of your deal or a fee from a franchisor. Before you sign, speak with a franchise attorney and a qualified financial adviser, and call owners from the disclosure document.