Econo Lodge Franchise Cost, Revenue & Review 2026
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 does not disclose unit-level revenue (no Item 19). 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 →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $175K – $955K
- 6th pct Lodging
- Avg gross sales
- N/A
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 677
- 66th 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 avg · 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.
- RETURNSAudited 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.
- RISKVerdict B (Above average), verdict score 55/100 (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).
- DECLINESystem contracting at -7.8% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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.
- 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.
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%
- percentage · 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
Econo Lodge did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Econo Lodge unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
15%
Below the 30–60% attractive-franchise band
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
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.
- Item 19 type
- occupancy, ADR and RevPAR
- Sample size
- 633
- vs category median 99 · large
- Transparency tier
- limited
- Categorical assessment of disclosure depth
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2024
- The FDD edition these figures were read from
- Transparency
- 0 / 10
- vs category median 0 / 10 · typical
Compared against 174 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% — below the Lodging average of 10.4%.
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 averages
How Econo Lodge Compares
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
- 44
- 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
3-year detail · Item 20
- Opened (3yr)
- 29
- Closed (3yr)
- 44
- Terminated (3yr)
- 4
- Non-renewed (3yr)
- 6
- 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 · 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.
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
- 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.
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.
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)
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.
Largest disclosed settlement: $779,398
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ 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 55 / 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 | none |
| 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 | 3 |
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
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 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 55 out of 100 (higher is better), 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.
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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.