Hometowne Studios By Red Roof Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Hometowne Studios By Red Roof franchise requires a total initial investment of $420K – $1.4M, including a $30K franchise fee and an ongoing 5.5% royalty[2]. The 2026 FDD on file does not yield a unit-revenue figure we can publish. SBA 7(a) loans show a 0.0% charge-off rate across 10 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $420K – $1.4M
- 20th pct Lodging
- Avg gross sales
- N/A
- Projection
- Royalty
- 5.5%
- 39th pct Lodging
- Units
- 80
- 44th pct Lodging
- SBA charge-off
- 0.0%
- % 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 $420K – $1.4M including a $30K franchise fee, 5.5% ongoing royalty.
- RETURNSItem 19 discloses hotel operating metrics (Average Daily Room Rate, Occupancy Rate, RevPAR, and Brand Contribution %) for 27 Affiliate-Owned, 51 Franchised, and 78 combined Hotels open at least one year during 2025 -- not whole-unit gross sales or net income figures, so avg_gross_sales/avg_net_income are not populated. 2025 figures: Franchised (51 hotels) avg Daily Room Rate $60.59, avg Occupancy 61.6%, avg RevPAR $37.30, avg Brand Contribution 36.5%; Affiliate-Owned (27 hotels) avg Daily Room Rate $53.31, avg Occupancy 69.8%, avg RevPAR $37.22, avg Brand Contribution 55.0%; Combined (78 hotels) avg Daily Room Rate $56.95, avg Occupancy 65.4%, avg RevPAR $37.26, avg Brand Contribution 45.2%.
- RISKVerdict A (Strongest tier), verdict score 73/100 (higher is better). SBA loan charge-off rate of 0.0% across 10 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- HomeTowne Studios, LLC
- Parent company
- Red Roof Franchising, LLC
- Ultimate parent
- WRRH LP
- Predecessor
- Crossland Suites
- Prior franchisor entity
- CEO title
- President
- Zack Gharib
- Incorporated in
- Delaware
- HQ
- 7815 Walton Parkway, New Albany, Ohio 43054
- Franchisor revenue
- $84.8M
- vs $92.0M prior year
Overview
About
HomeTowne Studios, LLC franchises economy extended-stay and transient lodging hotels under the HomeTowne Studios by Red Roof, HomeTowne Studios & Suites by Red Roof, HomeTown Inn, and HomeTowne Inn brand names. Hotels feature full or queen beds, in-room kitchens/kitchenettes, on-site guest laundry, weekly housekeeping, and vending, typically without full-service amenities like restaurants or room service.
- CEO
- Zack Gharib
- Headquarters
- Ohio
- Founded
- 2017
- FDD year
- 2026
Can you afford it, and what does the money buy?
Entry cost runs 92% below the typical lodging franchise.
Source: FDD 2026 · Items 5–7
published investment is a conversion of an existing 65-room property. The same filing prices new construction separately at $11,734,393-$14,457,291.
FDD Item 7 · 2026 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 | $1.2M |
| Total initial investment | $420K | $1.4M |
Source: Hometowne Studios By Red Roof 2026 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 – $1.4M
- Top 40% of category vs category
- Liquid capital req'd
- $112K – $154K
- Top 40% of category vs category
- Franchise fee
- $30K – $30K
- Top 40% of category vs category
- Royalty
- 5.5%
- typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.5% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Transfer fee | $15K |
| Inventory (initial) | $21K – $48K |
What do units actually make?
Source: FDD 2026 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for Hometowne Studios By Red Roof 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 Hometowne Studios By Red Roof 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: 2026 FDD
Financial Performance
Item 19 discloses hotel operating metrics (Average Daily Room Rate, Occupancy Rate, RevPAR, and Brand Contribution %) for 27 Affiliate-Owned, 51 Franchised, and 78 combined Hotels open at least one year during 2025 -- not whole-unit gross sales or net income figures, so avg_gross_sales/avg_net_income are not populated. 2025 figures: Franchised (51 hotels) avg Daily Room Rate $60.59, avg Occupancy 61.6%, avg RevPAR $37.30, avg Brand Contribution 36.5%; Affiliate-Owned (27 hotels) avg Daily Room Rate $53.31, avg Occupancy 69.8%, avg RevPAR $37.22, avg Brand Contribution 55.0%; Combined (78 hotels) avg Daily Room Rate $56.95, avg Occupancy 65.4%, avg RevPAR $37.26, avg Brand Contribution 45.2%.
An occupancy metric, not unit revenue
- Sample size
- 78
- vs category median 98
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
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
5.5% royalty + 3.0% ad fund.
Disclosure
Item 19 reports hotel occupancy metrics rather than annual gross sales, so unit revenue is not directly comparable.
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 Hometowne Studios By Red Roof Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 80
- Opened
- 9
- Last reporting year
- Closed
- N/A
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.9%
- Company-owned
- 27
- Corporate units in the system
- % franchised
- 66%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 9
- Terminated (3yr)
- 1
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 7
- Reacquired (3yr)
- 0
- Franchisor bought back
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 20 · 11 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
- 10
- Loan volume
- $30.9M
- Median loan
- $2.9M
- 50th percentile
- Charge-off rate
- 0.0%
- 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)
- 100.0%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 5
- Defaults
- 0
- Typical loan rate
- 7.3%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7211
- Jobs supported
- 111
- 0.4 per loan
- Lender concentration
- 40%
- top lender's share
Borrower mix: 10% went to startups / new businesses, 90% to established operators
Top lenders financing Hometowne Studios By Red Roof franchisees
Showing 3 of 5 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 Hometowne Studios By Red Roof's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 5 lenders with concentration factor
- Per-state charge-off rates across 9 states
- Startup risk premium and job creation velocity
- 4-year lending trend
Instant access. No subscription.
With a 0.0% charge-off rate across 10 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% 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
Bankruptcy (Item 4)
Disclosed in last 7 years
HTS's General Counsel, Gerrod Bede, previously served as General Counsel of ASTECH Engineered Products, Inc. (n/k/a AEP Legacy, Inc.), which filed for Chapter 11 reorganization on July 15, 2022 (Case No. 22-10635-BLS, Bankr. Del.); a plan of liquidation was confirmed May 20, 2024 and the case closed January 2, 2026. No bankruptcy of the franchisor itself was disclosed.
Audited financials (Item 21)
Yes
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
What are you signing up for?
Ongoing fees run about 8.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory sizeℹ | varies (as small as one or two blocks or as large as a small town) |
| Franchisor can compete | Yes |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Governing law | Ohio |
| Litigation count | 3 |
Items 10, 11
Training & Operations
- On-the-job training
- 8 hrs
- Ongoing training
- Required
- Field support
- 8 hrs/yr
- On-site visits per year
- Site selection
- franchisee
- Franchisor financing
- Not offered
- Item 10
- POS system
- Reservation Platform / PMS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Reservation Platform / PMS
Item 20 · call current owners
Franchisee Contacts
11 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 Hometowne Studios By Red Roof franchise?
The total investment to open a Hometowne Studios By Red Roof franchise ranges from $420K – $1.4M, 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 By Red Roof franchise owners earn?
No average owner earnings figure for Hometowne Studios By Red Roof is on file. Item 19 — where a franchisor may disclose what its outlets earn — is voluntary under the FTC Franchise Rule, and we have not established what this brand's FDD says. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
What is Item 19 in the Hometowne Studios By Red Roof 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 Hometowne Studios By Red Roof FDD and qualifies whose outlets they describe.
What is Hometowne Studios By Red Roof's franchise failure rate?
Based on SBA 7(a) loan data, Hometowne Studios By Red Roof has a charge-off rate of 0.0% across 10 loans, meaning 0.0% 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 Hometowne Studios By Red Roof franchise locations are there?
As of their most recent FDD filing, Hometowne Studios By Red Roof has 80 total units in the United States, including 53 franchised units and 27 company-owned units. 9 new units were opened in the latest reporting year.
Is Hometowne Studios By Red Roof a good franchise to buy?
FranchiseVerdict rates Hometowne Studios By Red Roof as a A-grade franchise with a verdict score of 73 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
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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.