Howard JohnsonFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Howard Johnson franchise requires a total initial investment of $350K – $11.9M, including a $35K franchise fee and an ongoing 5.0% royalty[2]. The 2026 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 11.9% charge-off rate across 201 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $350K – $11.9M
- 21st pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.0%
- 4th pct Lodging
- Units
- 133
- 38th pct Lodging
- SBA default
- 11.9%
- 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
Franchising since 1990. Systems this mature have refined operations and brand recognition.
Franchised units fell from 143 to 133 over 3 years. Investigate why operators are leaving.
14 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $350K – $11.9M including a $35K franchise fee, 5.0% ongoing royalty.
- Item 19 discloses "Qualified Chain Facilities performance" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict F (Bottom Quintile) with a risk score of 95/100. SBA loan charge-off rate of 11.9% across 201 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 14 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
- Howard Johnson International, Inc.
- Parent company
- Wyndham Hotels & Resorts, Inc.
- Incorporated in
- DE
- HQ
- 22 Sylvan Way, Parsippany, New Jersey 07054
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $1.4B
- vs $1.4B prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- WSSI
Other brands the franchisor or its parent operates (Item 1).
Overview
About
Howard Johnson franchisees operate mid-scale hotel properties, managing guest check-ins/check-outs, housekeeping, maintenance, food service, and front desk operations. Franchisees pay 5% royalty on gross room revenues while adhering to brand standards, marketing requirements, and corporate revenue management systems. Daily operations involve staffing, inventory management, regulatory compliance, and customer service across properties typically ranging from limited to full-service offerings.
- CEO
- Geoff Ballotti
- Headquarters
- NJ
- Founded
- 1990
- FDD year
- 2026
- States available
- 42
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $35K | $35K |
| Working capital (3–6 mo) | $130K | $196K |
| Equipment, build-out, other | $185K | $11.7M |
| Total initial investment | $350K | $11.9M |
Source: Howard Johnson 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
- $350K – $11.9M
- Better than avg vs category
- Liquid capital req'd
- $130K – $196K
- Better than avg vs category
- Franchise fee
- $35K – $35K
- Better than avg vs category
- Royalty
- 5.0%
- Gross Room Revenues · 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 | $734 |
| Transfer fee | $35K |
| Renewal fee | $35K |
| Total fee load | 8.5% of rev |
Financial Performance
This brand's FDD disclosed "Qualified Chain Facilities performance" 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 Howard Johnson Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 133
- Opened
- 5
- Last reporting year
- Closed
- 11
- Terminated
- 3
- Franchisor ended the franchise (per Item 20)
- Turnover rate
- 8.3%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -4.3%
- Net unit change last year
- 3-yr CAGR
- -7.0%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 10
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 3
- Reacquired (3yr)
- 0
- Franchisor bought back
- Transfer rate
- 2.1%
- Owners selling to other franchisees
- Continuity rate
- 92.4%
- Units that stayed open
- Termination rate
- 2.1%
- Franchisor-initiated terminations
- Ceased ops
- 5.6%
- 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
- 201
- Loan volume
- $276.0M
- Median loan
- $1.2M
- 50th percentile
- Charge-off rate
- 11.9%
- 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)
- 88.1%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 84
- Defaults
- 23
Vintage analysis
Howard Johnson 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 Howard Johnson'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
- 27-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Howard Johnson is a declining mid-size hotel franchise facing active litigation over alleged price-fixing and mandatory fees, with shrinking unit count, undisclosed unit economics, and corporate financial concerns that significantly elevate investment risk.
Litigation (Item 3)
5 case reference(s): 1 pending, 0 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche 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 95 / 100 rating
- 01MINORDeclining unit count (-4.3% YoY) indicates shrinking franchise system and potential brand deterioration
- 02MEDNo disclosed average revenue or net income (missing Item 19) prevents realistic ROI assessment and suggests weak unit economics
- 03HIGHMultiple active litigation matters including price-fixing conspiracies, mandatory fee disputes, and breach of contract claims create legal and reputational liability
- 04MINORFTC settled action for cyberattacks indicates past data security failures and regulatory scrutiny
- 05MINORWide investment range ($349K-$11.9M) suggests inconsistent unit performance and unclear capital requirements
- 06MED5% royalty on gross room revenues provides limited margin protection during downturns
- 07HIGHGoing Concern status is FALSE, signaling potential financial instability at corporate level
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 | 15 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Territory type | Negotiated |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Termination notice | 30 days |
| Termination groundsℹ | 4 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | New Jersey |
| Litigation count | 14 |
View Item 3 litigation summary
5 case reference(s): 1 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 45 hrs
- On-the-job training
- 30 hrs
- Training location
- On-site and off-site
- Franchisor financing
- Not offered
- Item 10
- POS system
- SynXis Property Hub and OPERA Cloud
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: SynXis Property Hub and OPERA Cloud
Item 20 · call current owners
Franchisee Contacts
97 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Howard Johnson · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Howard Johnson franchise?
The total investment to open a Howard Johnson franchise ranges from $350K – $11.9M, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Howard Johnson franchise owners earn?
Howard Johnson 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 Howard Johnson's franchise failure rate?
Based on SBA 7(a) loan data, Howard Johnson has a charge-off rate of 11.9% across 201 loans, meaning 11.9% 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 Howard Johnson franchise locations are there?
As of their most recent FDD filing, Howard Johnson has 133 total units in the United States, including 143 franchised units and 0 company-owned units. 5 new units were opened in the latest reporting year.
Is Howard Johnson a good franchise to buy?
FranchiseVerdict rates Howard Johnson as a F-grade franchise with a risk score of 95 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.