Econo LodgeFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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 does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 1.1% charge-off rate across 121 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $175K – $955K
- 8th pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.0%
- 4th pct Lodging
- Units
- 677
- 50th pct Lodging
- SBA default
- 1.1%
- system-wide median varies by category
Quick verdict · Lodging · color = vs category peers
Green = >15% above Lodging avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Only 1.1% of 121 SBA loans charged off, well below the 16% franchise average.
Franchising since 1990. Systems this mature have refined operations and brand recognition.
Franchised units fell from 734 to 677 over 3 years. Investigate why operators are leaving.
93 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $175K – $955K including a $30K franchise fee, 5.0% ongoing royalty.
- Item 19 discloses "Average Occupancy Rate, Average Daily Rate, and RevPAR" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict A (Top Quintile) with a risk score of 38/100. SBA loan charge-off rate of 1.1% across 121 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 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
- Legal entity
- Choice Hotels International, Inc.
- Incorporated in
- DE
- HQ
- 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $1.1B
- vs $1.4B prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
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.
- CEO
- Patrick S. Pacious
- Headquarters
- MD
- Founded
- 1963
- FDD year
- 2024
- States available
- 48
FDD Item 7 · 2024 filing · 13 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
- Better than avg vs category
- Liquid capital req'd
- $25K – $60K
- Better than avg vs category
- Franchise fee
- $30K – $53K
- Better than avg vs category
- Royalty
- 5.0%
- percentage_of_gross · 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 |
| Transfer fee | $35K |
| Renewal fee | $35K |
| Inventory (initial) | $10K – $68K |
| Total fee load | 8.5% of rev |
Financial Performance
This brand's FDD disclosed "Average Occupancy Rate, Average Daily Rate, and RevPAR" in Item 19 rather than annual gross sales. This metric cannot be directly compared across brands, so we omit it from rankings.
vs Lodging averages
How Econo Lodge Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 677
- Opened
- 29
- Last reporting year
- Closed
- 54
- Turnover rate
- 8.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -3.6%
- Net unit change last year
- 3-yr CAGR
- -7.8%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 57
- Terminated (3yr)
- 7
- Non-renewed (3yr)
- 4
- Transfers (3yr)
- 45
- Reacquired (3yr)
- 0
- Franchisor bought back
- 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 · 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 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.
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%
- 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
Vintage analysis
Econo Lodge charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Econo Lodge's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 12-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 1.1% charge-off rate across 121 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
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.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 38 / 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
| Initial term | 20 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Protected territory | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Termination notice | 30 days |
| Termination groundsℹ | 2 |
| Curable defaultsℹ | 5 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Maryland |
| Litigation count | 93 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 65 hrs
- On-the-job training
- 14 hrs
- Training location
- On-site and corporate
- Site selection
- franchisor
- 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
100 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Econo Lodge · FDD (2024) PDF
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?
Econo Lodge does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
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 734 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 A-grade franchise with a risk score of 38 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.
Claim this brandOther 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.