Bottom line
- Total investment $175K – $955K including a $30K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated CAUTION with a risk score of 73/100. SBA loan default rate of 0.0% across 130 loans (below the industry average).
- 93 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
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Econo Lodge unit return on the cash you put in?
Unlevered ROIC · per unit
18%
Below typical band (30–60%)
Overview
About
Franchisees operate budget hotel properties under the Econo Lodge brand, managing daily operations including front desk/housekeeping staff, guest relations, maintenance, and local marketing. They generate revenue through room bookings while paying Choice Hotels 5% of gross room revenues as royalties, plus fees for central reservation systems, marketing, and brand standards compliance.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 30 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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.
Score breakdown · what drove the 73 / 100 rating
- 01MEDShrinking unit base (-3.6% YoY) indicates systemic franchise dissatisfaction or market decline
- 02MINORNo financial performance disclosure (Item 19 absent) prevents ROI validation and suggests weak average unit economics
- 03HIGHMajor litigation including class action by ~90 franchisees alleging discriminatory practices and anti-competitive behavior raises systemic franchisor conduct concerns
- 04MINORMultiple royalty recovery lawsuits against former franchisees indicate cash flow stress and potential collection practices that may signal franchisor financial distress
- 05MINORUnprotected territory creates direct competition risk within same brand, eroding franchisee profitability
- 06MEDHigh royalty burden (5% of gross revenues) on mid-scale investment ($175K–$955K) with no disclosed average revenue creates uncertainty on net margins
- 07HIGH20-year term locks franchisees into commitment despite declining brand momentum and litigation exposure
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Econo Lodge · FDD (2024) PDF