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Hotel Franchise Fees, Land and PIP Rules Across 20 Brand FDDs

Three-story roadside hotel at dusk under renovation with scaffolding and a blank monument sign

A hotel franchise charges an initial fee of $7,500 to $100,000 or more, 6.5% to 9.5% of room revenue for royalty and brand fund, and a property improvement plan, in 20 filed FDDs we compared.

Key takeaways

  • Royalty plus brand fund ran from 6.5% (MGallery) to 9.5% (Comfort Inn) of room revenue in the 18 hotel FDDs that charge both as percentages, with a median of 8.5% (FCB fee dataset, Item 6).
  • Most hotel initial fees are formulas, not flat prices: Quality Inn charges $500 per room with a $45,000 minimum, and Super 8 charges the greater of $25,000 or $250 per room (Quality Inn FDD, 2026 and Super 8 FDD, 2025, Item 5).
  • 18 of the 20 Item 7 tables put no dollar figure on land; Super 8’s says “These figures exclude the cost of land” for a 65-room build that needs at least 1.5 acres (Super 8 FDD, Item 7 Note 6).
  • Quality Inn’s 75-room conversion table budgets $159,000 to $1,186,000 for property improvements alone, before labor and deferred maintenance (Quality Inn FDD, Item 7 Note 4).
  • Both opened agreements run 20 years; Quality Inn lets either side exit on the 5th, 10th or 15th anniversary with 12 months’ notice (Quality Inn FDD, Item 17).
Key numberValueWhere it is printed
Hotel FDDs in the dataset20 brands, issued March 31, 2025 to July 15, 2026Minnesota CARDS filings
Royalty range (percentage brands)5% to 6% of room revenueItem 6
Brand, marketing or system fund range1.5% to 4%Item 6
Item 7 tables with a dollar figure for land2 of 20Item 7
FDDs that include an Item 1910 of 20Item 19 (presence only)
Quality Inn franchised hotels, end of 20251,566 (1,633 at the start of 2023)Quality Inn Item 20, Table 1
Super 8 franchised U.S. hotels, end of 20241,375 (1,486 at the start of 2022)Super 8 Item 20, Table 1

What do 20 hotel franchise disclosure documents charge?

Twenty hotel FDDs filed in Minnesota between March 2025 and July 2026 price the franchise in three layers: an Item 5 fee usually tied to room count, an Item 6 royalty and brand fund taken from room revenue, and an Item 7 estimate built on one model hotel. The table lists all 20 alphabetically, with our tier label and the printed land treatment.

Tier is our grouping from each franchisor’s Item 1 description, not a brand’s own class. “GRR” means gross room revenue as each FDD defines it; Quality Inn’s definition also counts meeting and banquet room revenue (Item 6 Note 2). Rows marked “coded dataset” come from our Item 7 dataset and fee files and were not re-read for this page; the two “opened in full” rows were.

The full dataset, with technology fees, transfer rules, Item 19 presence and Item 20 counts for every row, is compiled in a 20-row, 21-column file (hotel_fdd_fees.csv) from which every table on this page is drawn. For the sector picture behind these filings, including how many U.S. hotels operate under a franchise and how hotel lending compares with other sectors, see our hotel franchise statistics report.

Brands A to Q: Boarders Inn & Suites to Quality Inn

BrandTierItem 5 initial feeItem 6 royalty + brand fundItem 7 model and rangeLand in Item 7Source
Boarders Inn & SuitesEconomy$45,000 flat; $2,500 application fee credited5% of GRR or $2.25 per room per day; flat marketing feeNew build, 35 to 90 rooms: $6,529,624 to $16,928,199ExcludedFDD 2026-07-15 (coded)
Comfort InnMidscale$500 per room, $50,000 minimum6.0% + 3.5%New build, 89 rooms: $10,318,405 to $16,302,115ExcludedFDD 2026-04-01 (coded)
ECHO Suites Extended StayExtended stay$35,000 to 124 rooms, then $400 per room5.5% + 3.5%New build, 124 rooms: $11,506,418 to $17,258,078ExcludedFDD 2025-03-31 (coded)
GrandStay Residential SuitesExtended stay$35,000 flat5% + 2%New build, 53 to 120 rooms: $5,038,400 to $24,175,200Included: $500,000 to $1,050,000FDD 2026-03-20 (coded)
Marriott Hotels, JW MarriottUpscale full service$100,000 plus $400 per room over 2506% rooms (3% F&B) + 1.62% plus $50,000 and $510 per room a yearNew build, 300 rooms: $93,910,590 to $168,938,990Not estimatedFDD 2025-03-31 (coded)
MasterHost Inn, Red Carpet Inn, Scottish Inns, Passport InnEconomy$7,500 to $15,000 by brand$25 + $15 per room per monthNew build, 40 rooms: $1,384,895 to $2,611,995Row printed as VariesFDD 2026-03-24 (coded)
MGallery Hotel CollectionCollection or lifestyle$75,000 plus $300 per room over 2505% + 1.5%New build, 200 rooms: $61,660,740 to $113,343,740Included: $5M to $15M rowFDD 2026-04-10 (coded)
Outset Collection by HiltonCollection or lifestyle$50,000 application fee5% + 4%New build or conversion, 100 rooms: $2,407,290 to $52,176,023ExcludedFDD 2025-10-23 (coded)
Park Inn by RadissonMidscaleGreater of $45,000 or $450 per room5.5% + 3.25%Conversion, 70 rooms: $279,095 to $1,500,495Assumes hotel ownedFDD 2026-04-01 (coded)
Quality InnMidscale$500 per room ($550 on transfer), $45,000 minimum5.25% + 3.5%Conversion, 75 rooms: $332,295 to $1,859,295ExcludedFDD 2026-04-01 (opened)

Brands R to W: Radisson to WoodSpring Suites

BrandTierItem 5 initial feeItem 6 royalty + brand fundItem 7 model and rangeLand in Item 7Source
RadissonUpscale full service$500 per room, $75,000 minimum6% + 3%180 rooms, conversion to new build: $9,490,495 to $55,271,100ExcludedFDD 2026-04-01 (coded)
Radisson IndividualsCollection or lifestyle$500 per room, $75,000 minimum6% + 3%150 rooms, conversion to new build: $4,476,645 to $62,470,100ExcludedFDD 2026-04-01 (coded)
Red Lion Inn & SuitesMidscaleGreater of $40,000 or $300 per room5% + 3%New build, 125 rooms: $17,074,113 to $23,615,800Row printed as VariableFDD 2026-03-31 (coded)
Rodeway InnEconomy$250 per room, $25,000 minimum5% + 3.5%Conversion, 57 rooms: $108,795 to $702,495ExcludedFDD 2026-04-01 (coded)
Super 8EconomyGreater of $25,000 or $250 per room5.5% + 3%New build, 65 rooms: $4,663,694 to $6,929,131; conversion, 100 rooms: $281,046 to $2,598,263ExcludedFDD 2025-03-31 (opened)
The JamesCollection or lifestyleGreater of $75,000 or $500 per room5% + 3.5%New build, 250 rooms: $86,066,578 to $158,220,099Row printed as VariableFDD 2026-03-31 (coded)
Thompson HotelsUpscale full serviceGreater of $100,000 or $400 per room5% rooms (2% F&B) + 3.5%New build, 200 rooms: $70,600,993 to $125,569,001ExcludedFDD 2026-05-14 (coded)
Unscripted by HyattCollection or lifestyleGreater of $75,000 or $500 per room5% + 3%Conversion, 110 rooms: $1,917,244 to $9,560,595ExcludedFDD 2026-03-27 (coded)
WaterWalk Extended StayExtended stayGreater of $75,000 or $500 per unit6% of gross revenue + 3%New build, 126 units: $19,860,979 to $27,008,153ExcludedFDD 2025-03-31 (coded)
WoodSpring SuitesExtended stay$50,000 to 122 rooms, then $300 per room6% + 2.5%New build, 122 rooms: $8,835,420 to $14,566,908ExcludedFDD 2026-04-01 (coded)

How do per-room fee formulas change at 80 versus 150 rooms?

A per-room formula means the initial fee is flat only until the room count crosses a break point, then it climbs with every key. In Quality Inn’s FDD, $500 per room with a $45,000 minimum stays at $45,000 through 90 rooms and reaches $75,000 at 150. Super 8’s greater of $25,000 or $250 per room reaches $37,500 at 150 rooms.

BrandItem 5 formula80 rooms150 roomsPer-room charge takes over at
Quality Inn$500 per room, $45,000 minimum$45,000$75,00091 rooms
Super 8Greater of $25,000 or $250 per room$25,000$37,500101 rooms
Comfort Inn$500 per room, $50,000 minimum$50,000$75,000101 rooms
Park Inn by RadissonGreater of $45,000 or $450 per room$45,000$67,500101 rooms
Rodeway Inn$250 per room, $25,000 minimum$25,000$37,500101 rooms
WoodSpring Suites$50,000 to 122 rooms, then $300 per room$50,000$58,400123 rooms
ECHO Suites Extended Stay$35,000 to 124 rooms, then $400 per room$35,000$45,400125 rooms
Red Lion Inn & SuitesGreater of $40,000 or $300 per room$40,000$45,000134 rooms
Radisson$500 per room, $75,000 minimum$75,000$75,000151 rooms
WaterWalk Extended StayGreater of $75,000 or $500 per unit$75,000$75,000151 units
Thompson HotelsGreater of $100,000 or $400 per room$100,000$100,000251 rooms
Figure 1Initial fee at 80 and 150 roomsThe 8 formulas in the dataset that charge more for the larger hotel
$0$12,500$25,000$37,500$50,000$50,000Comfort Inn$35,000ECHO Suites Extended Stay$45,000Park Inn by Radisson$45,000Quality Inn$40,000Red Lion Inn & Suites$25,000Rodeway Inn$25,000Super 8$50,000WoodSpring Suites
Source: Item 5 formulas in each brand's FDD (Minnesota CARDS); room counts illustrative; FCB arithmetic.

At 150 rooms, Quality Inn’s Item 5 formula prints a $75,000 initial fee and Super 8’s $37,500. Room counts are illustrative; formulas from each brand’s FDD, accessed November 2026.

The room counts are illustrations; the formulas are printed in each brand’s Item 5. Fees actually charged can sit below the formula: Quality Inn collected affiliation fees of $2,500 to $65,450 on new agreements in 2025, and Super 8 initial fees ranged from $10,000 to $25,000 in 2024, both disclosed in Item 5. Our franchise costs guide explains how Item 5 fees sit inside the Item 7 total.

What slice of room revenue goes to the brand every month?

Royalty plus the marketing, reservation or brand fund took 6.5% to 9.5% of room revenue across 18 hotel FDDs, before loyalty, booking-channel and technology charges. Quality Inn charges 5.25% royalty and a 3.5% Marketing and Reservation Fee (8.75%); Super 8 charges 5.5% royalty and a 3% System Assessment Fee (8.5%), both on the preceding month’s gross room revenue.

Figure 2Royalty plus brand fund, % of room revenue18 hotel FDDs that charge both as percentages, issued March 2025 to July 2026
Royalty (Item 6)Marketing, reservation or brand fund (Item 6)0.0%2.5%5.0%7.5%10.0%6.0%3.5%Comfort Inn5.5%3.5%ECHO Suites Extended Stay5.0%4.0%Outset Collection by Hilton6.0%3.0%Radisson6.0%3.0%Radisson Individuals6.0%3.0%WaterWalk Extended Stay5.5%3.2%Park Inn by Radisson5.2%3.5%Quality Inn5.0%3.5%Rodeway Inn5.5%3.0%Super 85.0%3.5%The James5.0%3.5%Thompson Hotels6.0%2.5%WoodSpring Suites5.0%3.0%Red Lion Inn & Suites5.0%3.0%Unscripted by Hyatt6.0%1.6%Marriott Hotels, JW Marriott5.0%2.0%GrandStay Residential Suites5.0%1.5%MGallery Hotel Collection
Source: Minnesota-filed FDDs, Item 6; Quality Inn and Super 8 opened in full, 16 others from the FCB coded FDD fee dataset; accessed November 2026.

Royalty plus brand fund ranged from 6.5% (MGallery) to 9.5% (Comfort Inn) of room revenue in 18 hotel FDDs issued March 2025 to July 2026, Item 6.

Two filings do not fit a percentage chart. Hospitality International’s economy brands charge a fixed $25 per room per month royalty plus $15 per room per month for marketing, and Boarders Inn & Suites lets the owner choose 5% of gross room revenue or $2.25 per guest room per day at signing. Marriott Hotels adds fixed program charges of $50,000 a year plus $510 per guestroom on top of 1.62% of gross room sales (coded Item 6 rows).

Which other monthly charges sit in Item 6?

The royalty and fund are only the first two rows. Item 6 runs 14 printed pages in the Quality Inn filing (pages 27 to 40) and 12 in Super 8’s (pages 29 to 40), and several charges are billed per booking or per member stay rather than as a share of all revenue.

ChargeQuality Inn (FDD April 1, 2026, Item 6)Super 8 (FDD March 31, 2025, Item 6)
Royalty5.25% of GRR5.5% of GRR
Marketing or system feeMarketing and Reservation Fee 3.5% of GRRSystem Assessment Fee 3% of GRR
Loyalty program4.5% to 5.5% of room revenue from Choice Privileges members4.25% to 5.5% of amounts on which Wyndham Rewards members earn points
Global distribution systemCurrently $7.70 per reservation$1.98 per reservation
Online channels$4.00 per consumed reservation through connected online travel agents; 3% on direct online stays (Choice Accelerate)Internet Booking Fees $1.98 per reservation
Technology$9.65 per room monthly, $625 minimum, $925 maximumPMS support $734 to $1,050 per month
Quality enforcementNon-Compliance Penalty $35 to $25,000 per instanceReinspection Fee $2,500, then $3,000, then $3,500

Per-booking fees make the effective rate depend on the hotel’s booking mix, which no FDD can print in advance. Our royalty rate study compares the 6.5% to 9.5% hotel band with royalty structures in 13 other sectors of the same 259-filing sample.

Why do most hotel Item 7 totals leave out the land?

The FTC Franchise Rule tells franchisors to list real property in Item 7 “if applicable”, and hotel franchisors mostly treat land as not estimable. In 18 of 20 filings the land line is excluded, blank or printed as “Varies”. Only GrandStay ($500,000 to $1,050,000) and MGallery ($5 million to $15 million) put a dollar range on land, according to the coded Item 7 notes.

The rule text sits at 16 CFR 436.5(g)(1)(i)(C), which lists “Real property, whether purchased or leased” among the Item 7 expenses. Super 8’s new-build table states “These figures exclude the cost of land”, and Quality Inn’s conversion table “does not include the cost of purchasing or leasing real estate” (Item 7 Note 1), because it assumes the hotel already exists and is operating.

Quality Inn FDD Item 7 conversion table with the Property Improvement row of $159,000 to $1,186,000 boxed
Quality Inn’s 75-room conversion table budgets $159,000 to $1,186,000 for property improvements and excludes real estate. Quality Inn FDD issued April 1, 2026, Item 7, page 42, accessed November 3, 2026.
What several guides sayWhat the filings printSource
A 2026 owner’s guide: initial fee $25,000 to $150,000, no brand namedFormulas tied to room count, from $7,500 flat (Passport) to the greater of $100,000 or $400 per room (Thompson)Item 5, 20 FDDs
The same guide: royalty 4% to 7%, marketing 2% to 4%Royalty 5% to 6% and fund 1.5% to 4% in the 18 percentage filingsItem 6
A widely shared 2017 business-magazine roundup: the cheapest hotel franchise costs more than $7.5 millionRodeway Inn 57-room conversion $108,795 to $702,495; Super 8 100-room conversion $281,046 to $2,598,263, both assuming you already own the hotelItem 7
Item 7 total read as “the cost”Land excluded or unpriced in 18 of 20 tablesItem 7 notes

Our initial investment dataset records the Item 7 table used for each brand. The Federal Trade Commission’s consumer guide to buying a franchise notes that the FDD must reach you at least 14 days before you sign or pay, which leaves time to get land and construction bids priced against the Item 7 table.

What does a conversion PIP require, and on what clock?

A property improvement plan (PIP) is the brand’s written list of upgrades an existing hotel must finish to join or stay in the system. Super 8 inspects the hotel, writes the PIP and attaches it to the franchise agreement at signing (Item 11). Renovation must start within 30 days of the Effective Date, and pre-opening items are due by the PIP’s date or within 90 days (Schedule D).

Timeline of a hotel conversion from application through day 30 and day 90 to opening, with late fees Conversion clock in two hotel franchise agreements Super 8 FDD (March 31, 2025) Item 5, Item 11, Schedule D; Quality Inn FDD (April 1, 2026) Items 5 to 7 1 Apply 2 Inspection 3 Sign 4 Day 30 5 Day 90 6 Open Super 8: $2,500 Quality Inn: $5,000 credited Brand inspects and writes the PIP PIP attached to the agreement; initial fee due Super 8: renovation must start Super 8 default deadline for pre-opening items Post-opening PIP items continue If the clock slips Extension fee: $5,000 (Super 8 per extension; Quality Inn per 3-month extension) Super 8 reinspection fee: $2,500 first failure, $3,000 second, $3,500 third Quality Inn non-compliance penalty, including PIP non-compliance: $35 to $25,000 per instance Later sale of the hotel: buyer gets a new PIP (Quality Inn PIP fee $3,000) Days count from the agreement’s Effective Date. A PIP can set its own dates.
Super 8’s Schedule D starts renovation within 30 days and sets a 90-day default for pre-opening PIP items; both FDDs charge $5,000 per extension. Super 8 FDD 2025, Quality Inn FDD 2026.
  1. Apply: Super 8 charges a $2,500 Application Fee; Quality Inn collects $5,000, credited against the affiliation fee (Item 5).
  2. Inspection: the brand inspects the hotel and writes the PIP; Quality Inn provides “a customized property improvement plan unique to your hotel” on application (Item 7 Note 4).
  3. Sign: the PIP is attached to the agreement and the initial fee is due.
  4. Day 30: Super 8 renovation must start (Schedule D, section 1.1).
  5. Day 90: Super 8 default deadline for pre-opening items unless the PIP sets another date (section 1.2).
  6. Open: post-opening PIP items continue on the PIP schedule.
  7. If the clock slips: extension fee $5,000 in both filings (Quality Inn per 3-month extension); Super 8 reinspection fee $2,500 first failure, $3,000 second, $3,500 third; Quality Inn non-compliance penalty, including PIP non-compliance, $35 to $25,000 per instance.
  8. Later sale of the hotel: the buyer gets a new PIP (Quality Inn PIP fee $3,000).
PIP ruleQuality Inn (2026 FDD)Super 8 (2025 FDD)
Item 7 renovation lineProperty Improvement $159,000 to $1,186,000, 75 roomsFacility Improvements $0 to $1,086,600, 100 rooms
Per-room total in the conversion table$4,431 to $24,791$2,810 to $25,983
Furniture, fixtures and equipment$5,000 to $7,000 per room if below standard (Note 13)$71,770 to $484,200 for 100 rooms
Left out of the estimateDeferred maintenance such as parking lot, HVAC and exterior, and labor (Note 4)Impact fees, site evaluation, geotechnical and civil engineering fees (Note 6)
PIP fee on a later sale$3,000 when 50% or more changes hands$1,500 per post-opening PIP request

The Federal Trade Commission’s guide warns that some franchisors “require periodic renovations or design changes” that may raise costs. In a hotel FDD that warning has a document behind it: ask for the actual PIP, not the Item 7 range, before you sign, because Quality Inn’s own note says your cost “may fall outside the estimated range provided”.

What changes when you buy a hotel that already flies a flag?

Buying a franchised hotel usually means a new franchise agreement, a transfer or relicense fee, and a fresh PIP, not a takeover of the seller’s terms. Super 8 requires the buyer to sign the conversion form of agreement and “renovate the Facility as if it were an existing facility converting to the System”, with the PIP issued after the application (Franchise Agreement Section 9.3).

BrandWhat the buyer pays the franchisorSource
Quality InnGreater of the then-current affiliation fee ($550 per room on transfers) or $45,000, plus $3,000 PIP fee and $995 re-licensing trainingItems 5 and 6, opened
Super 8Relicense Fee, greater of $25,000 or $250 per room; transfers paid $5,000 to $25,000 in 2024Items 5 and 6, opened
Comfort InnGreater of the then-current affiliation fee or $65,000Item 6, coded
WoodSpring SuitesGreater of the then-current affiliation fee or $60,000Item 6, coded
Marriott HotelsGreater of $150,000 or $500 per guestroomItem 6, coded
GrandStay Residential Suites$5,000Item 6, coded
Red Carpet Inn and sister brands$2,500Item 6, coded

For an 80-room Quality Inn, $550 per room is $44,000, so the $45,000 floor applies; at 150 rooms the transfer affiliation fee is $82,500. Our franchise transfer fee study compares these hotel charges with transfer fees in other sectors, where few filings charge a transfer fee as large as the initial fee.

How locked in is a hotel franchisee once the sign goes up?

Both opened agreements run 20 years, and leaving early costs a formula sum. Quality Inn lets either party end the agreement on the 5th, 10th or 15th anniversary of opening with 12 months’ written notice; outside those windows, liquidated damages apply (Items 6 and 17). Super 8 sets liquidated damages at the greater of $2,000 per room or 24 months of average royalties and system fees.

TermQuality InnSuper 8
Length20 years from the opening date; no renewal provision (Item 17 a, b)20 years from the first day of the month after opening (Item 17 a)
Penalty-free exit5th, 10th or 15th anniversary, 12 months’ notice, either sideOnly if listed conditions are met, including 2 years open and occupancy below 50% (Item 6 note)
Liquidated damages before openingRooms x 36 months x $70Half of the greater of $2,000 per room or the fee formula
Worked example, 80 rooms, before opening80 x 36 x $70 = $201,600$2,000 x 80 = $160,000, halved to $80,000
Territory (Item 12)No exclusive territory unless grantedNo exclusive territory; a negotiated Protected Territory with no new Super 8 after signing

Item 12 language matters more for hotels than for most sectors: in the data behind our territory rights study, 14 of the 18 coded lodging filings grant no protected area in the standard agreement. Our franchise agreement terms dataset tracks the 20-year hotel term against a median 10-year initial term in other sectors.

Franchise, convert or stay independent: which route fits your property?

The route depends on what you already control: an operating hotel, land, or neither. An unflagged hotel converts under a PIP, land leads to a new-build Item 7 table with land added by you, and a buyer without either inherits a flag through a transfer. Staying independent avoids the 6.5% to 9.5% Item 6 load in this dataset and the reservation and loyalty programs it funds.

Decision flowchart routing hotel owners to conversion, change of flag, new build or buying a flagged hotel Which hotel franchise route does your starting point fit? Do you own an operating hotel? Yes No Is it on a brand already? Do you control land? No Yes Yes No Conversion Ask for the PIP before you sign Quality Inn, 75 rooms: $332,295 to $1,859,295 Change flags Check the current agreement’s exit window and liquidated damages before applying New build Item 7 excludes land in 18 of 20 Super 8, 65 rooms: $4,663,694 to $6,929,131 Buy a flagged hotel Transfer or relicense fee, new agreement and a new PIP
Four routes into a hotel franchise by starting point, with the Item 7 or transfer figure to check for each. Quality Inn FDD 2026 and Super 8 FDD 2025.
If your situation isThen the filing step isFigure to check
You own an operating hotel that is not on a brandConversion: ask for the PIP before you signQuality Inn, 75 rooms: $332,295 to $1,859,295 (Item 7)
Your hotel is on a brand already (change flags)Check the current agreement’s exit window and liquidated damages before applyingQuality Inn: up to 36 months of $70 per room outside the anniversary windows (Item 6)
You control land and plan a new buildUse the new-construction table and price the land yourself; Item 7 excludes land in 18 of 20Super 8, 65 rooms: $4,663,694 to $6,929,131 on at least 1.5 acres
You plan more than 100 roomsApply the Item 5 per-room formula150 rooms: Quality Inn $75,000; Super 8 $37,500
You have neither hotel nor land (buy a flagged hotel)Budget the transfer or relicense fee, a new agreement and a new PIPMarriott Hotels transfer: greater of $150,000 or $500 per guestroom
You want no royalty or brand fundStay independent and give up the brand reservation system the fund pays forQuality Inn Marketing and Reservation Fee 3.5% of GRR (Item 6)

Ten of the 20 FDDs include an Item 19; Super 8’s reports 2024 average daily rate, occupancy and RevPAR for its U.S. hotels, and Quality Inn’s covers franchised hotels open at December 31, 2025. We do not reproduce those figures; read them in each brand’s current FDD and see our Item 19 study for what such tables can and cannot show. Lenders financing a conversion or build often price the deal from these same Item 7 tables; our SBA franchise loan data covers 7(a) and 504 franchise lending from FY1991 to FY2026. This page is general information from public filings, not legal, financial or investment advice; ask a franchise attorney to compare the PIP deadlines and liquidated damages formula against your lender’s draw schedule.

Frequently asked questions

Is it better to franchise a hotel or stay independent?

It turns on what the brand fees buy for your property. In 18 hotel FDDs, royalty plus brand fund took 6.5% to 9.5% of room revenue, and that fund pays for the reservation system and marketing (Quality Inn Item 6). An independent hotel skips those fees and the PIP, and also runs its own distribution. Compare the Item 6 table with your current booking channels before choosing.

How much does a hotel franchise cost?

Item 7 totals in 20 hotel FDDs ran from $108,795 for a 57-room Rodeway Inn conversion to $168,938,990 for a 300-room Marriott Hotels new build. Most exclude land. Super 8 prints $4,663,694 to $6,929,131 for a 65-room new build and $281,046 to $2,598,263 for a 100-room conversion of a hotel you already own (Item 7).

Can an independent hotel become a franchise?

Yes, through a conversion. The brand inspects the hotel and writes a property improvement plan that is attached to the franchise agreement. Under Super 8’s Schedule D, renovation starts within 30 days of signing and pre-opening items are due within 90 days unless the PIP sets other dates. Quality Inn budgets $159,000 to $1,186,000 in improvements for 75 rooms (Item 7).

How long does a hotel franchise agreement last?

Both hotel FDDs we opened in full set a 20-year term (Item 17). Quality Inn has no renewal provision but lets either side end the agreement on the 5th, 10th or 15th anniversary of opening with 12 months’ notice. Leaving outside those windows triggers liquidated damages, which before opening equal rooms times 36 months times $70 (Item 6).

Do hotel franchise costs include the land?

Usually not. In 18 of 20 hotel FDDs, the Item 7 table excludes land, leaves the line blank or prints it as Varies. Super 8 states that its figures exclude the cost of land and that a 65-room hotel needs at least 1.5 acres. GrandStay and MGallery are the two filings that print a land range (Item 7).

What is a PIP fee on a hotel sale?

When a franchised hotel changes hands, the brand inspects it and writes a new property improvement plan for the buyer. Quality Inn charges a $3,000 Property Improvement Plan Fee when 50% or more of the ownership transfers, plus a transfer fee of at least $45,000. Super 8 charges $1,500 per post-opening PIP request and a Relicense Fee of at least $25,000 (Items 5 and 6).

How we compiled this

In November 2026 we opened 2 hotel FDDs in full from the Minnesota Department of Commerce CARDS database (Quality Inn, issued April 1, 2026; Super 8, issued March 31, 2025) and read Items 1, 5, 6, 7, 11, 12, 17, 19 and 20 and Super 8’s Schedule D. The other 18 rows come from our coded datasets of 259 Minnesota-filed FDDs and were not re-read; CARDS searches for Fairfield and Home2 filings returned no Clean FDD. Room-count and liquidated-damage examples are our arithmetic on printed formulas. We excluded every Item 19 figure.

Sources

Opened in full for this page

Coded dataset rows (FDDs cited by our fee, Item 7 and transfer datasets)

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