HomeTowne StudiosFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A HomeTowne Studios franchise requires a total initial investment of $420K – $14.8M, including a $30K franchise fee and an ongoing 5.5% royalty[2]. The 2025 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $420K – $14.8M
- 22nd pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.5%
- 31st pct Lodging
- Units
- 84
- 34th pct Lodging
- SBA default
- N/A
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
The system grew 80% year-over-year. Fast growth means demand, but can strain support.
Bottom line
- Total investment $420K – $14.8M including a $30K franchise fee, 5.5% ongoing royalty.
- Item 19 discloses "Performance data (ADR, Occupancy, RevPAR, Brand Contribution) for Affiliate-Owned and Franchised Hotels" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict A (Top Quintile) with a risk score of 19/100.
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- HomeTowne Studios, LLC
- Parent company
- Red Roof Franchising, LLC
- Ultimate parent
- WRRH LP
- Incorporated in
- DE
- HQ
- 7815 Walton Parkway, New Albany, Ohio 43054
- Auditor
- Plante & Moran, PLLC
- Audited financials
- Franchisor revenue
- $94.2M
- vs $92.0M prior year
Affiliated brands
- of Extended Stay America
- of WRRH
Other brands the franchisor or its parent operates (Item 1).
Overview
About
HomeTowne Studios franchisees operate extended-stay hotels targeting budget-conscious travelers, managing day-to-day operations including housekeeping, front desk, maintenance, and guest services across studio-style rooms. Franchisees handle occupancy management, pricing, local marketing, and staffing while paying 5.5% royalties on all room revenue regardless of profitability.
- CEO
- Zack Gharib
- Headquarters
- OH
- Founded
- 2017
- FDD year
- 2025
- States available
- 25
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $112K | $154K |
| Equipment, build-out, other | $278K | $14.7M |
| Total initial investment | $420K | $14.8M |
Source: HomeTowne Studios 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $420K – $14.8M
- Better than avg vs category
- Liquid capital req'd
- $112K – $154K
- Better than avg vs category
- Franchise fee
- $30K – $30K
- Better than avg vs category
- Royalty
- 5.5%
- Gross Room Revenues · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 8.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.5% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Transfer fee | $15K |
| Renewal fee | $50 |
| Inventory (initial) | $21K – $48K |
| Total fee load | 8.5% of rev |
Financial Performance
This brand's FDD disclosed "Performance data (ADR, Occupancy, RevPAR, Brand Contribution) for Affiliate-Owned and Franchised Hotels" 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 HomeTowne Studios Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 84
- Opened
- 20
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 39
- Corporate units in the system
- % franchised
- 54%
- vs corporate-owned
- Net growth (yr3)
- +80.0%
- Net unit change last year
- 3-yr CAGR
- +150.0%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 0
- Terminated (3yr)
- 3
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 6
- Reacquired (3yr)
- 0
- Franchisor bought back
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.
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 20
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining franchise system with active litigation, regulatory violations, franchisee collection actions, missing financial disclosures, and alarming unit contraction suggest fundamental business model stress and franchisor-franchisee relationship breakdown.
Litigation (Item 3)
2 case reference(s): 1 pending, 0 settled.
Bankruptcy (Item 4)
Disclosed in last 7 years
Bankruptcy Code. A plan of liquidation was confirmed on May 20, 2024. No other bankruptcy information is required to be disclosed in this Item.
Audited financials (Item 21)
Yes · Plante & Moran, PLLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 19 / 100 rating
- 01MED20% unit decline YoY (84 units, down from ~105) signals system contraction and potential franchisee distress
- 02MINORNo Item 19 financial disclosure (avg revenue/net income) prevents ROI validation on $420k-$14.8M investment range
- 03HIGHMultiple litigation issues: pending breach of franchise agreement, Maryland regulatory consent order, and two 2024 collection actions against franchisees suggest franchisor-franchisee relationship deterioration
- 04MINORExtremely wide investment range ($420k to $14.8M) with no average unit volume data creates transparency risk and suggests inconsistent unit economics
- 05MINORCollection actions filed by affiliate against franchisees in 2024 indicates cash flow problems among current franchisees
- 06MINOR5.5% royalty on gross revenue (not net) provides no relief during downturns and compounds pressure on struggling units
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 |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Negotiated geographic area |
| Protected territory | Yes |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Ohio |
| Litigation count | 4 |
View Item 3 litigation summary
2 case reference(s): 1 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 37 hrs
- On-the-job training
- 7 hrs
- Training location
- On-site and classroom
- Site selection
- franchisee
- POS system
- Reservation Platform / PMS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Reservation Platform / PMS
Item 20 · call current owners
Franchisee Contacts
27 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
HomeTowne Studios · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a HomeTowne Studios franchise?
The total investment to open a HomeTowne Studios franchise ranges from $420K – $14.8M, 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 HomeTowne Studios franchise owners earn?
HomeTowne Studios 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 HomeTowne Studios's franchise failure rate?
SBA 7(a) loan charge-off data is not available for HomeTowne Studios (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many HomeTowne Studios franchise locations are there?
As of their most recent FDD filing, HomeTowne Studios has 84 total units in the United States, including 18 franchised units and 39 company-owned units. 20 new units were opened in the latest reporting year.
Is HomeTowne Studios a good franchise to buy?
FranchiseVerdict rates HomeTowne Studios as a A-grade franchise with a risk score of 19 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.
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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.