Bottom line
- Total investment $350K – $11.9M including a $35K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 229 loans (below the industry average).
- 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
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Howard Johnson unit return on the cash you put in?
Unlevered ROIC · per unit
1%
Below typical band (30–60%)
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.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
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.
Score breakdown · what drove the 63 / 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
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
97 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Howard Johnson · FDD (2026) PDF