Econo Lodge Franchise Cost, Revenue & Review 2026
- Investment
- $175K – $955K
- Disclosed sales
- partial, no system average
- SBA charge-off
- 1.1%
- on 121 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Econo Lodge is a Choice Hotels economy-lodging franchise of budget roadside properties. Franchisees own and operate individual hotels, running front desk, housekeeping, and maintenance on Choice's reservation and marketing systems.
FranchiseVerdict summary · 2026
A Econo Lodge franchise requires a total initial investment of $175K – $955K, including a $30K franchise fee and an ongoing 5.0% royalty[2]. The 2024 FDD on file does not yield a unit-revenue figure we can publish. SBA 7(a) loans show a 1.1% charge-off rate across 121 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: high - issued more than two years ago
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored4 of 5 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $175K – $955K
- 6th pct Lodging
- Avg gross sales
- N/A
- Projection
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 677
- 67th pct Lodging
- SBA charge-off
- 1.1%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Lodging · color = vs category peers
Green = favorable by >10% vs Lodging median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $175K – $955K including a $30K franchise fee, 5.0% ongoing royalty.
- RETURNSItem 19 reports occupancy, ADR and RevPAR rather than annual gross sales, so unit revenue is not directly comparable.
- RISKVerdict B (Above average), verdict score 51/100 (higher is better). SBA loan charge-off rate of 1.1% across 121 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -25 franchised outlets in the latest year (29 opened, 54 closed); 13 signed but not yet open (Item 20).
- LEGAL91 litigation matters disclosed in Item 3, higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Choice Hotels International, Inc.
- Parent company
- Choice Hotels International, Inc.
- FDD Item 1, page 8 of the 2024 FDD
- Incorporated in
- Delaware
- HQ
- 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $1.5B
- vs $1.4B prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Same owner · FDD Item 1, page 8
11 other brands on this site name Choice Hotels International, Inc. as parent or ultimate parent in their own FDD.
- ASCEND HOTEL COLLECTIONA
- Clarion / Clarion PointeB
- Country Inn & Suites by RadissonB
- Everhome SuitesB
- MainStay SuitesA
- Park Inn by RadissonD
- RODEWAY INNB
- Radisson IndividualsC
- Sleep InnB
- Suburban StudiosB
- WoodSpring SuitesB
Grouped by the owner's name as each filing prints it (this page: the 2024 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Patrick S. Pacious
- Headquarters
- MD
- Founded
- 1963
- FDD year
- 2024
- States available
- 48
Can you afford it, and what does the money buy?
Entry cost runs 94% below the typical lodging franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Affiliation Fee | $30K | $35K | |
| Property Improvements | $68K | $510K | |
| Insurance | $3K | $88K | |
| Advertising | $3K | $40K | |
| Opening Inventories of Supplies | $10K | $68K | |
| Orientation and Hospitality Training Fees | $1K | $3K | |
| Mandatory On-Premise Signs | $15K | $80K | |
| Working Capital Required Before Operations Begin | $10K | $30K | |
| Hardware required to operate choiceADVANTAGE property management system | $4K | $11K | |
| choiceADVANTAGE Software License and Systems Onboarding | $5K | $7K | |
| Design and engineering costs and inspections | $10K | $50K | |
| Pre-Opening Photography | $1K | $3K | |
| Additional Funds for 3-Month Initial Period | $15K | $30K | |
| Total initial investment | $175K | $955K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $175K – $955K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $30K
- Top 40% of category vs category
- Franchise fee
- $30K
- Top 40% of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 3.5%
- typical 3–5%
- Total fee load
- 8.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.5% of gross sales |
| Technology fee | $653 |
| Training fee | $3K |
| Transfer fee | $35K |
| Renewal fee | $35K |
| Inventory (initial) | $10K – $68K |
| Total fee load | 8.5% of rev |
What do units actually make?
Source: FDD 2024 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for Econo Lodge is on file. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Econo Lodge unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
An occupancy metric, not unit revenue
- Item 19 type
- occupancy, ADR and RevPAR
- Sample size
- 633
- vs category median 98 · large
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
Compared against 175 Lodging brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 8.5% (near the Lodging median).
Disclosure
Item 19 reports occupancy, ADR and RevPAR rather than annual gross sales, so unit revenue is not directly comparable.
Operator retention
System contracting at -7.8% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Lodging medians
How Econo Lodge Compares
Category median of published Lodging brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 677
- Opened
- 29
- Last reporting year
- Closed
- 54
- Terminated
- 4
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 6
- Term expired, not renewed (per Item 20)
- Turnover rate
- 8.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -7.8%
- Net unit change over 3 years
- 3-yr CAGR
- -7.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 4
- Not renewed
- 6
- Transferred
- 45
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 13
- 0.02 per open outlet · Item 20 Table 5
- Projected new
- 11
- Franchisor's next-year forecast
- Termination rate
- 1.5%
- Franchisor-initiated terminations
- Ceased ops
- 7.8%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 22 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
78 current owners across 22 states.
- CA 23
- AL 10
- AR 8
- CO 5
- TX 4
- AZ 3
- FL 3
- GA 3
- NC 3
- CT 2
- IL 2
- MS 2
- +10 more states
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 121
- Loan volume
- $188.9M
- Median loan
- $1.4M
- 50th percentile
- Charge-off rate
- 1.1%
- on 121 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 98.9%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 57
- Defaults
- 1
- Typical loan rate
- 5.4%
- avg rate to borrowers
- Franchised industry avg
- 6.3%
- brand beats franchise avg ↓
- Jobs supported
- 1,211
- 0.6 per loan
- Lender concentration
- 7%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Franchise vs independent — in hotels (except casino hotels) and motels, franchised businesses charge off at 6.3% vs 9.2% for independents — franchising is associated with 32% lower SBA default risk in this category.
Vintage analysis
Econo Lodge charge-off rate by loan vintage
Top lenders financing Econo Lodge franchisees
Showing 3 of 57 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Econo Lodge from SBA 7(a) FOIA data.
- Principal loss rate
- 0.2%
- Avg SBA guarantee
- 74%
- Avg interest rate
- 5.36%
- Avg chargeoff amount
- $387K
- Lender concentration
- 6.6%
- Job velocity
- 0.6 per $100K
- NAICS benchmark
- 7.6%
- NAICS 721110
- Jobs supported
- 1,211
Top SBA lendersTop lender holds 7% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | First Western SBLC, Inc | 8 | $10.2M | 0.0% |
| 2 | PromiseOne Bank | 7 | $10.1M | 0.0% |
| 3 | BankUnited, National Association | 6 | $9.7M | 0.0% |
| 4 | Columbia Bank | 6 | $8.3M | 0.0% |
| 5 | Commonwealth Business Bank | 6 | $11.5M | 0.0% |
| 6 | TD Bank, National Association | 5 | $7.4M | 0.0% |
| 7 | Bank of Hope | 5 | $6.0M | 0.0% |
| 8 | Pinnacle Bank | 5 | $7.5M | 0.0% |
| 9 | Hanmi Bank | 5 | $10.7M | 0.0% |
| 10 | The Huntington National Bank | 4 | $2.7M | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 14 | 0 | 0.0% |
| GAGeorgia | 10 | 0 | 0.0% |
| OHOhio | 10 | 0 | 0.0% |
| PAPennsylvania | 9 | 0 | 0.0% |
| NCNorth Carolina | 7 | 0 | 0.0% |
| WAWashington | 7 | 0 | 0.0% |
| COColorado | 6 | 0 | 0.0% |
| TXTexas | 6 | 0 | 0.0% |
| ILIllinois | 5 | 1 | 20.0% |
| VAVirginia | 5 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
With a 1.1% charge-off rate across 121 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 1.1% — 93% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Econo Lodge presents high-risk investment with a contracting unit base, aggressive litigation against franchisees, undisclosed unit economics, unprotected territories, and evidence of strained franchisor-franchisee relationships.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
3 pending actions: (1) Canadian class action re undisclosed destination marketing fees; (2) ~90 franchisees' suit re discriminatory/anticompetitive practices, stayed pending arbitration; (3) T&T Management breach/trade-secrets suit. Franchisor also initiated numerous debt-collection arbitrations in prior fiscal year.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited consolidated financials of Choice Hotels International, Inc. (parent/franchisor). FY2023 total revenues $1,544,165K; includes royalty/licensing/management fees $513,412K, initial franchise fees $27,787K, platform/procurement $75,114K, owned hotels $97,641K, other $46,051K, and other revenues from franchised/managed properties $784,160K.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 51 / 100 verdict
- 01MEDShrinking unit base (-3.6% YoY) indicates systemic franchise dissatisfaction or market decline
- 02HIGHMajor litigation including class action by ~90 franchisees alleging discriminatory practices and anti-competitive behavior raises systemic franchisor conduct concerns
- 03MINORMultiple royalty recovery lawsuits against former franchisees indicate cash flow stress and potential collection practices that may signal franchisor financial distress
- 04MINORUnprotected territory creates direct competition risk within same brand, eroding franchisee profitability
- 05MEDHigh royalty burden (5% of gross revenues) on mid-scale investment ($175K–$955K) with no disclosed average revenue creates uncertainty on net margins
- 06HIGH20-year term locks franchisees into commitment despite declining brand momentum and litigation exposure
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 12 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Maryland |
| Jury trial waiver | Yes |
| Governing law | MD |
| Litigation count | 91 |
View Item 3 litigation summary
3 pending actions: (1) Canadian class action re undisclosed destination marketing fees; (2) ~90 franchisees' suit re discriminatory/anticompetitive practices, stayed pending arbitration; (3) T&T Management breach/trade-secrets suit. Franchisor also initiated numerous debt-collection arbitrations in prior fiscal year.
Items 10, 11
Training & Operations
- Classroom training
- 47 hrs
- On-the-job training
- 0 hrs
- Training location
- North Bethesda, Maryland or Scottsdale, Arizona (Choice Onboard); virtual (HOST)
- Ongoing training
- Required
- Time to open
- 18 mo
- From signing to launch
- Site selection
- Franchisee selects; franchisor must approve
- Franchisor financing
- Offered
- Item 10
- POS system
- choiceADVANTAGE
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: choiceADVANTAGE
Item 20 · call current owners
Franchisee Contacts
78 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Econo Lodge franchise?
The total investment to open a Econo Lodge franchise ranges from $175K – $955K, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Econo Lodge franchise owners earn?
Item 19 of the Econo Lodge FDD discloses figures for part of the system but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Econo Lodge?
Econo Lodge is franchised by Choice Hotels International, Inc.. Source: FDD Item 1, 2024 filing.
What is Item 19 in the Econo Lodge FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Econo Lodge FDD and qualifies whose outlets they describe.
What is Econo Lodge's franchise failure rate?
Based on SBA 7(a) loan data, Econo Lodge has a charge-off rate of 1.1% across 121 loans, meaning 1.1% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Econo Lodge franchise locations are there?
As of their most recent FDD filing, Econo Lodge has 677 total units in the United States, including 677 franchised units and 0 company-owned units. 29 new units were opened in the latest reporting year.
Is Econo Lodge a good franchise to buy?
FranchiseVerdict rates Econo Lodge as a B-grade franchise with a verdict score of 51 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Econo Lodge, you can request corrections or provide updated information.
Other Lodging franchises
Compare similar franchise opportunities in the Lodging category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.