Red Lion Hotels Franchise Cost & 2026 FDD Data
46/100
Second tier
46 this brand65 Lodging medianlikely 35–57: narrower with more SBA loans (moderate confidence)
Higher is better · an editorial assessment, not investment advice
#1,944 of 3,069 graded brands
Why a B: Held back by scale, legal record and transparency. See all six factors
- Total investment
- not available
- Avg gross sales
- not disclosed
- SBA charge-off
- 0.0%
None of the 13 resolved SBA 7(a) loans to Red Lion Hotels owners charged off (approved since FY1991); Lodging median 3.2%.
Data from the FDD filing + SBA 7(a) records. Analysis by FranchiseVerdict · Methodology · Website · Report an error · Franchisor? Claim this listing
FranchiseVerdict summary · 2026 FDD
Per the 2026 FDD, a Red Lion Hotels franchise does not disclose total investment in its current FDD, including a $75K franchise fee. Once open, the ongoing royalty is 5.0%. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the verdict grade - an editorial assessment, not investment advice - reflects that. SBA 7(a) loans show a 0.0% charge-off rate on 13 resolved loans. Verdict grade: B (Second tier), an editorial assessment, not investment advice.
Sources: 2026 FDD · SBA 7(a) loan records (FOIA) ·
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low (issued within the last 12 months)
Evidence for the headline figures: partial✗ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored2 of 4 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
Quick verdict · vs Lodging median
Top edge: green = better than the Lodging median by more than 10%, red = worse by more than 10%, gray = within 10% or no benchmark. Source: FDD filings + SBA 7(a).
Data from public FDD filings and SBA records. Methodology
Bottom line
- RETURNSThe FDD makes no financial performance representation in Item 19, so it discloses no revenue or earnings figures; Item 19 is voluntary, and the Financial performance section explains what that does and does not mean.
- GROWTHIn the latest Item 20 year, the number of franchised outlets did not change (0 opened, 0 closed).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Things to check before you sign (3)
- The franchisor keeps the right to compete inside your territory (Item 12, territory).
- The franchisor receives rebates or payments from suppliers you buy from (Item 8, required suppliers).
- Limited data: this page holds only part of the filing. Read the FDD itself before relying on any figure here.
Checked and clear: no auditor doubt that the franchisor can keep operating, no net loss of franchised outlets in the latest Item 20 years, SBA charge-off rate 0.0%, below the 3.2% category median and no rule that the owner must run it personally. Not on file here, so ask: pending litigation and jury-trial waiver.
What to do next
Step 1: Read the FDD itself.
Free: the franchisor must give it to you at least 14 days before you sign or pay. Or look it up in a state registry (Wisconsin, Minnesota, California). What to read first.
Step 2: Talk to current and former owners.
Free: Item 20 of the FDD lists every current owner and those who left last year, most with a phone number. Questions to ask.
Step 3: Talk to an SBA lender.
Free: the SBA's Lender Match, or the lenders already lending to this brand in the SBA section. Ask what you would personally guarantee and what the monthly payment would be. If you plan to use retirement savings, ask a CPA about the rules for that first.
Step 4: Have a franchise attorney review the FDD and agreement.
Free: your state bar's lawyer referral service can name franchise lawyers, and many offer a short first consultation. Bring the checks listed above.
Research steps, not investment or legal advice.
Can you afford it, and what does the money buy?
Source: FDD 2026 · Items 5–7 (fees and startup costs)
Do you qualify? The filing states no minimum net worth or liquid capital. Ask Sonesta RL Hotels Franchising Inc. (Item 1: 400 Centre Street, Newton, Massachusetts 02458) and your lender what they require, and keep living costs for the first year outside the deal.
Item 6 · what you pay once you are open
Ongoing fees
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fundBrand-wide marketing pool. Brand Promotion Fee of 3.5% of Gross Rooms Revenue, may be increased up to 4.5% upon notice | 3.0% |
| Technology feeTechnology Fee of $9.00 per Guest Room per month (does not include cost/installation/maintenance/repair of equipment) | $9/month |
| Training feeAdditional training charge listed in Item 6 | $5,000 |
| Transfer fee | $75,000 |
| Renewal fee | $75,000 |
| Total fee loadnear the Lodging median of 8.5% | 8.0% of sales |
What do units actually make?
This FDD makes no Item 19 financial performance representation - a voluntary item - so unit sales aren't disclosed.
Source: FDD 2026 · Item 19 (sales and earnings)
Returns modelOne unit · several units · editable
Red Lion Hotels makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no gross sales figures are disclosed. The return models need one gross sales figure to start from, plus the operating costs that turn gross sales into a profit. Enter your own and the calculator runs on your assumptions; nothing here is modelled until you do.
Returns model · one unit
What would one Red Lion Hotels unit leave you each year after the loan payment?
Not disclosed in Item 19. Enter your own gross sales assumption
Gross sales, not profit: the costs below decide what is left.
No Item 19 figures are on file for this brand. Enter your own costs from a lease quote, a payroll plan and calls with current owners.
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.
No Item 7 range on file. Enter your own
FDD reports $526K to $1.8M
Left after the loan payment · per year
The unit's EBITDA minus the assumed loan payment. Before tax, depreciation and any cost your inputs leave out (insurance, accounting and legal, licenses, technology fees): not take-home pay.
Gross sales are not profit. Neither the filing nor a stated assumption on this page supplies annual revenue, direct costs, labor, rent / occupancy, other operating costs and initial investment. Enter your own (a lease quote, owner calls) and the model runs on it.
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 · filed by Sonesta RL Hotels Franchising Inc.
Financial performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the verdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
vs Lodging medians
How Red Lion Hotels compares
Category median of published Lodging brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Who are you contracting with?
Sonesta RL Hotels Franchising Inc., owned by Red Lion Hotels Corporation (RLHC).
Same franchisor, other programs: Classico Collection By Sonesta, MOD A Sonesta Collection, Signature Inn, Sonesta ES Suites, Sonesta Hotels and Resorts / Royal Sonesta, Sonesta Select / Sonesta Essential, Sonesta Simply Suites. Each is a separate offering with its own page.
Item 1 (the franchisor) · who you're contracting with
The franchisor
Corporate structure & franchisor financials
- Legal entity
- Sonesta RL Hotels Franchising Inc.
- Parent company
- Red Lion Hotels Corporation (RLHC)
- FDD Item 1, page 8 of the 2026 FDD
- Ultimate parent
- Sonesta Holdco Corporation (via Sonesta International Hotels Corporation)
- FDD Item 1, page 9 of the 2026 FDD
- Predecessor
- Vance Hotels, Inc. (renamed Red Lion Hotels Franchising, Inc. in 2005, then Sonesta RL Hotels Franchising Inc. in 2021)
- Prior franchisor entity
- CEO title
- Co-President and Co-Chief Executive Officer
- Keith Pierce and Jeffrey Leer (Co-Presidents/Co-CEOs effective April 2026)
- Incorporated in
- Washington
- HQ
- 400 Centre Street, Newton, Massachusetts 02458
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $58.5M
- latest fiscal year in the 2026 FDD; $51.1M the year before
Same owner · FDD Item 1, page 9
7 other brands on this site name Sonesta Holdco Corporation (via Sonesta International Hotels Corporation) as parent or ultimate parent in their own FDD.
- Classico Collection By Sonesta (grade C)
- MOD A Sonesta Collection (grade B)
- Signature Inn (grade B)
- Sonesta ES Suites (grade B)
- Sonesta Hotels and Resorts / Royal Sonesta (grade B)
- Sonesta Select / Sonesta Essential (grade B)
- Sonesta Simply Suites (grade B)
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
Grants franchises to operate upper upscale, full-service luxury boutique hotels under The James brand and related proprietary marks (Brand Hotels), providing access to a central reservation system, marketing/advertising programs, training, and brand standards.
- CEO
- Keith Pierce and Jeffrey Leer (Co-Presidents/Co-CEOs effective April 2026)
Is the system healthy?
0 franchised outlets between the first and last year-ends Item 20 prints (0 to 0).
Source: FDD 2026 · Item 20 (outlets opened, closed and transferred)
Item 20 (outlet counts) · unit dynamics
The growth chart
- Company-owned
- 0
- Corporate units in the system
Last fiscal year · Item 20 rates and pipeline
- Reacquired
- 0
- Franchisor bought back
Item 20 · franchised units at year end
Franchised units held at 0 from 2023 to 2025
Axis does not start at zero.
Source and method
Government records
SBA loan data
Lenders charged off 0.0% of 13 resolved SBA 7(a) loans, below the 3.2% category median. 7(a) is the SBA's main small-business loan; a resolved loan was paid in full or charged off.
- Loans on file
- 23
- SBA 7(a) loans matched to this brand, incl. those still being repaid
- Loan volume
- $56.2M
- Average loan
- $2.4M
- loan volume divided by loans
- Charge-off rate
- 0.0%
- 0 of 13 resolved loans
- Paid in full
- 100.0%
- of resolved loans
- Recent-loan charge-off
- Not shown
- fewer than 10 recent loans resolved on file
- Lenders
- 17
- Average interest rate
- 6.3%
- Jobs reported
- 233
- Lender concentration
- 13%
- top lender's share
Cumulative: every 7(a) loan matched to this brand in the SBA’s FOIA files, approved FY1991 onward. Historical lending data, not predictive of future performance. How SBA charge-off rates are calculated
Benchmark: the median Lodging brand charges off 3.2% (29 brands with a published rate, same cumulative window and source). This brand is 3.2 points below it.
Borrower mix: of 22 loans with a business-age entry, 21 recorded an age: 3 (14%) went to startups or businesses under two years old and 18 (86%) to established businesses or ownership changes; 1 was marked unanswered.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Full SBA lending reportlenders · charge-off rate · trend
Lender network · SBA 7(a)
SBA Lending Report
Lender, state and yearly detail for Red Lion Hotels from SBA 7(a) FOIA loan records.
- Average SBA guarantee
- 78%
- Average interest rate
- 6.3%
- Lender concentration
- 13%
- Jobs reported
- 233
Top 10 SBA lenders by loan count
| Loans | Volume | Charge-off |
|---|---|---|
| Bank of Hope | ||
| 3 | $10.3M | Not on file |
| Simmons Bank | ||
| 2 | $1.3M | Not on file |
| Celtic Bank Corporation | ||
| 2 | $4.0M | Not on file |
| Poppy Bank | ||
| 2 | $7.0M | Not on file |
| Royal Business Bank | ||
| 2 | $6.3M | Not on file |
A lender’s rate counts only its resolved loans, the loans that have finished (paid in full or charged off); a 0.0% often means few of its loans have finished. Under 10 resolved loans, the rate reads “Too few”.
Charge-off rate by state (top 10 by loans)
| State | Loans | Charged off | Rate |
|---|---|---|---|
| WA Washington | 5 | 0 | Too few4 resolved |
| TX Texas | 4 | 0 | Too few3 resolved |
| AR Arkansas | 2 | 0 | Too few0 resolved |
| ID Idaho | 2 | 0 | Too few1 resolved |
| MI Michigan | 2 | 0 | Too few2 resolved |
| CA California | 1 | 0 | Too few1 resolved |
| IA Iowa | 1 | 0 | Too few0 resolved |
| KS Kansas | 1 | 0 | Too few0 resolved |
| MO Missouri | 1 | 0 | Too few0 resolved |
| MT Montana | 1 | 0 | Too few0 resolved |
Rate: charged-off loans over resolved loans (paid in full plus charged off), shown from 10 resolved loans. "Too few": under 10 resolved. The Loans column counts every approval in the window, including loans still being repaid.
SBA 7(a) loans approved per year
Borrower profile
The SBA's own business-age labels (4)
Source: SBA 7(a) FOIA loan-level data, matched to the brand by FranchiseVerdict.
With a charge-off rate of 0.0% on 13 resolved loans, very few of this brand's SBA 7(a) loans have been charged off.
What are the risks?
Main risk in the grade: scale, then legal and transparency. The reasons are below.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Verdict grade + FDD Items 3 (litigation), 4 (bankruptcy), 8 (required suppliers), 16 (what you may sell), 21 (audited financials)
Risk and legal
Grade B: Second tier, 46/100 (category median 65); the full grade is at the top of the page.
How the grade is built
Why a B, factor by factor
- Financial health NeutralAudited financials; no going-concern doubt; statements are the parent's, so this stays near neutral
- Unit economics NeutralNo investment total on file, so neutral
- Unit growth Neutral0 franchised outlets between the first and last year-ends Item 20 prints (0 to 0); growth is not graded below a 10-outlet starting base
- Scale Weighs on it, weakest dimensionNo outlet open yet
- Legal Weighs on itItem 3 covers the franchisor's whole portfolio, so no matter is attributed to this brand (neutral); a bankruptcy disclosed in Item 4 (an officer's)
- Transparency Weighs on itItem 19 declines to disclose financial performance; audited financials
- Adjustments after the six dimensions (+9 points)SBA loan record: the SBA charge-off rate (0.0% on 13 resolved loans) is under 2%, a range the score counts in a brand's favour, so it added 10 points.Rounding: the score is kept as a whole number, which moved it by 1 point.
From the six scored dimensions, an editorial assessment, not investment advice. How the score is built
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Item 3 discloses 8 concluded stockholder lawsuits (2021) challenging RLHC/Sonesta merger proxy disclosures (settled, $240,000 in plaintiffs' fees paid); several concluded commercial suits including Radisson Hotels v. RLHC/SRLHF (tortious interference, settled $500,000), RLHF v. Polselli, Chu v. RLHF, RLHF v. Khan (2 related suits, settled $500,000), RLHF v. Vemulapalli ($80,000), RLHF v. Minnesota Hospitality ($150,000), RLHC v. Tiya Hospitality ($10,500), RLHF v. JS Three Star ($81,000 counterclaim); and 6 pending 2025 suits by Sonesta RL Hotels Franchising Inc. against former franchisees/guarantors to collect unpaid amounts (Bliss Investment, SIGMM, MSDS MGT, Gonzales WS Hospitality, Pardeshi LLC, Grain Valley Hospitality).
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
Office Properties Income Trust and certain subsidiaries (entities for which certain of the franchisor's officers/directors have management responsibility) filed Chapter 11 bankruptcy petition (No. 25-90530) on October 30, 2025 in the U.S. Bankruptcy Court of Texas (Houston).
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
The revenue figures are in the Franchisor tab, under The franchisor.
Franchisor entity revenue (not unit-level)
Total revenues line is a consolidated franchisor-level figure (franchise fees + system/reservation/marketing fees + loyalty program fees + other fee revenue + hotel operations), not a per-unit hotel revenue metric -- no per-outlet Item 19 sales figures were disclosed.
ⓘ 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
Ask what the franchisor earns on the supplies it sells you or the rebates it takes (Item 8).
- Franchisor sells you products: No
- Franchisor takes supplier rebates: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before your own operating costs.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12 (territory), 15 (owner participation) and 17 (renewal, termination and disputes)
Contract and territory detail
| Allowed renewals | 1 |
|---|---|
| Protected territory | No |
| Exclusive territory | No |
| Franchisor can compete | Yes |
| Who runs it (Item 15) | A manager may run it |
| Right of first refusal | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Mandatory arbitration | Yes |
| Arbitration location | Within 50 miles of franchisor's principal place of business (currently Newton, Massachusetts) |
| Governing law | Massachusetts |
Items 10 (financing), 11 (training and support)
Training and operations
- Classroom training
- 25 hrs
- On-the-job training
- 0 hrs
- Training location
- Virtual or on-site (at Franchisor's designated learning management system / location)
- Ongoing training
- Required
- Site selection
- Franchisee, subject to franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Restaurant Point of Sale (POS)
- Operating tech stack
Items 5 (initial fees) & 11 (training and support)
Franchisor support
Franchisee contacts
We hold no owner list for this brand. Item 20 of the FDD lists the current and former owners; the free FDD is the source.
Frequently asked questions
What do Red Lion Hotels franchise owners earn?
Red Lion Hotels makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no gross sales figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the verdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Red Lion Hotels?
Red Lion Hotels is franchised by Sonesta RL Hotels Franchising Inc. Its parent company is Red Lion Hotels Corporation (RLHC). The ultimate parent named in the FDD is Sonesta Holdco Corporation (via Sonesta International Hotels Corporation). Source: FDD Item 1, 2026 filing.
What is Item 19 in the Red Lion Hotels 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. The Red Lion Hotels FDD does not make an Item 19 financial performance representation, so this page shows no earnings figure.
What is Red Lion Hotels' franchise failure rate?
There is no published franchise failure rate. What is measurable is Red Lion Hotels' SBA charge-off rate: 0.0% on 13 resolved loans. Put plainly: None of the 13 resolved SBA 7(a) loans to Red Lion Hotels owners charged off (approved since FY1991). The SBA charge-off rate is the share of a brand's resolved SBA 7(a) loans to its franchisees that the SBA wrote off, including purchased guarantees. Resolved means paid in full or charged off; active loans are excluded because their outcome is not yet known. It is a lending outcome, not a count of closed businesses. A franchisee can repay and close, or default and keep trading.
Is Red Lion Hotels a good franchise to buy?
FranchiseVerdict gives Red Lion Hotels a B Verdict grade (Second tier) with a verdict score of 46 out of 100 (higher is better), an editorial assessment, not investment advice. Held back by scale (no outlet open yet), legal record (Item 3 covers the franchisor's whole portfolio, so no matter is attributed to this brand: neutral) and transparency (Item 19 declines to disclose financial performance). The “Why a B” section on this page lists all six dimensions and any adjustment. Speak with current franchisees before making any investment decision.
Other Lodging franchises
Similar investment first, then by grade
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.