MOD A Sonesta Collection Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
MOD, a Sonesta Collection brand, is a select-service hotel franchise offering modern, value-focused properties. Franchisees own and operate the hotels, managing front desk, housekeeping, and revenue under Sonesta standards.
FranchiseVerdict summary · 2026
A MOD A Sonesta Collection franchise requires a total initial investment of $1.7M – $18.5M, including a $75K franchise fee and an ongoing 5.0% royalty[2]. The 2024 FDD does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $1.7M – $18.5M
- 26th pct Lodging
- Avg gross sales
- N/A
- 0 outlets
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 0
- 0th pct Lodging
- SBA charge-off
- N/A
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 $1.7M – $18.5M including a $75K franchise fee, 5.0% ongoing royalty.
- RETURNSFinancials are the audited consolidated statements of the parent, Red Lion Hotels Corporation (RLHC); SRLHF is a wholly-owned subsidiary guaranteed by RLHC. Amounts in thousands, FY ended Dec 31, 2023. Total revenues = total fee revenue ($44,992K) plus hotel operations ($10,574K).
- RISKVerdict C (Average), verdict score 39/100 (higher is better).
- LEGAL19 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
Corporate structure & franchisor financials
- Legal entity
- Sonesta RL Hotels Franchising Inc.
- Parent company
- Red Lion Hotels Corporation
- Ultimate parent
- Sonesta International Hotels Corporation
- CEO title
- President and Director
- John Murray
- Incorporated in
- WA
- HQ
- 400 Centre Street, Newton, Massachusetts 02458
- Auditor
- Not specified in text (independent auditor report present)
- Audited financials
- Franchisor revenue
- $55.6M
- vs $54.0M prior year
Overview
About
- CEO
- John Murray
- Headquarters
- MA
- Founded
- 1986
- FDD year
- 2024
- States available
- 0
Can you afford it, and what does the money buy?
Entry cost is about average for a lodging franchise.
Source: FDD 2024 · Items 5–7
published investment is a conversion of an existing 250-room hotel. The same filing prices new construction separately at $55,452,195-$93,215,415.
FDD Item 7 · 2024 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $75K | $75K |
| Working capital (3–6 mo) | $525K | $1.8M |
| Equipment, build-out, other | $1.1M | $16.7M |
| Total initial investment | $1.7M | $18.5M |
Source: MOD A Sonesta Collection 2024 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
- $1.7M – $18.5M
- Top 40% of category vs category
- Liquid capital req'd
- $525K – $1.8M
- Middle of category vs category
- Franchise fee
- $75K – $75K
- Middle of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 2.5%
- typical 3–5%
- Total fee load
- 16.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.5% of gross sales |
| Technology fee | $9 |
| Training fee | $5K |
| Transfer fee | $0 |
| Renewal fee | $0 |
| Total fee load | 16.5% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
MOD A Sonesta Collection 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 MOD A Sonesta Collection unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
1%
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
Financials are the audited consolidated statements of the parent, Red Lion Hotels Corporation (RLHC); SRLHF is a wholly-owned subsidiary guaranteed by RLHC. Amounts in thousands, FY ended Dec 31, 2023. Total revenues = total fee revenue ($44,992K) plus hotel operations ($10,574K).
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 16.5% — above the Lodging average of 10.4%.
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
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 MOD A Sonesta Collection Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 0
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Company-owned
- 0
- Corporate units in the system
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
This is a pre-launch or failing hotel franchise with zero operating units, opaque financials, pending litigation, parent company going-concern warnings, and an unproven business model that carries extreme capital risk.
Litigation (Item 3)
1 pending class action (Special Situations Fund III QP v. Adam Portnoy re TravelCenters merger, Maryland Circuit Court 2023). 18 concluded: 8 RLHC merger stockholder suits (dismissed 2021, $240K settlement); Radisson v. SRLHF/RLHC (settled $500K, 2021); SRLHF v. Polselli (dismissed 2020); Linger Chu v. SRLHF (settled, franchisee paid $250K, 2019); Khan Lawsuits x2 (settled $500K, 2019); Vemulapalli (settled $80K, 2019); Minnesota Hospitality (settled $150K, 2019); Tiya Hospitality/$10.5K (2018); JS Three Star (settled, 2017); SRLHF v. Patel et al. (pending, filed 2023).
Largest disclosed settlement: $500,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Not specified in text (independent auditor report present)
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: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 39 / 100 verdict
- 01MINORZero operating franchise units with unknown growth trajectory indicates brand is either pre-launch or experiencing complete system collapse
- 02MINORNo Item 19 financial disclosure (avg revenue/net income) prevents any ROI validation or performance benchmarking
- 03MINORMultiple pending and concluded lawsuits including class action, stockholder disputes, and franchisee contract conflicts suggest systemic corporate governance and franchisor-franchisee relationship problems
- 04HIGHParent company (Sonesta/RLHC merger entity) disclosed 'going concern' accounting doubt signals potential insolvency or financial distress
- 05MINORUnprotected territory with 5% royalty on gross rooms revenue creates margin pressure and direct franchisor-franchisee competition
- 06MINORHigh initial investment ($1.67M) paired with zero operating units means no proven unit economics or franchisee success track record
- 07MINOR20-year term lock-in is excessive given brand immaturity and financial uncertainty of parent company
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 16.5% 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 |
|---|---|
| Renewal term | 20 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Termination groundsℹ | 20 |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Newton, Massachusetts (within 50 miles of franchisor's principal place of business) |
| Jury trial waiver | No |
| Governing law | MA |
| Litigation count | 19 |
View Item 3 litigation summary
1 pending class action (Special Situations Fund III QP v. Adam Portnoy re TravelCenters merger, Maryland Circuit Court 2023). 18 concluded: 8 RLHC merger stockholder suits (dismissed 2021, $240K settlement); Radisson v. SRLHF/RLHC (settled $500K, 2021); SRLHF v. Polselli (dismissed 2020); Linger Chu v. SRLHF (settled, franchisee paid $250K, 2019); Khan Lawsuits x2 (settled $500K, 2019); Vemulapalli (settled $80K, 2019); Minnesota Hospitality (settled $150K, 2019); Tiya Hospitality/$10.5K (2018); JS Three Star (settled, 2017); SRLHF v. Patel et al. (pending, filed 2023).
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 24 hrs
- Training location
- Virtual or on-site at franchisee's hotel
- Ongoing training
- Required
- Time to open
- 36 mo
- From signing to launch
- Site selection
- Franchisee (franchisor does not assist with site selection)
- Franchisor financing
- Offered
- Item 10
- POS system
- Oracle OPERA Cloud Property Management System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Oracle OPERA Cloud Property Management System
Item 20 · call current owners
Franchisee Contacts
1 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
MOD A Sonesta Collection · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a MOD A Sonesta Collection franchise?
The total investment to open a MOD A Sonesta Collection franchise ranges from $1.7M – $18.5M, with an initial franchise fee of $75K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do MOD A Sonesta Collection franchise owners earn?
MOD A Sonesta Collection 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 MOD A Sonesta Collection 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 MOD A Sonesta Collection FDD and qualifies whose outlets they describe.
What is MOD A Sonesta Collection's franchise failure rate?
SBA 7(a) loan charge-off data is not available for MOD A Sonesta Collection (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.
Is MOD A Sonesta Collection a good franchise to buy?
FranchiseVerdict rates MOD A Sonesta Collection as a C-grade franchise with a verdict score of 39 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?
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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.