Red Lion Hotels Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Red Lion Hotels franchise does not disclose total investment in its current FDD, including a $75K franchise fee and an ongoing 5.0% 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 23 loans[1]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- N/A
- Avg gross sales
- N/A
- 0 outlets
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 0
- 0th 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 N/A including a $75K franchise fee, 5.0% ongoing royalty.
- RETURNSTotal 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.
- RISKVerdict C (Average), verdict score 45/100 (higher is better). SBA loan charge-off rate of 0.0% across 23 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
- Sonesta RL Hotels Franchising Inc.
- Parent company
- Red Lion Hotels Corporation (RLHC)
- Ultimate parent
- Sonesta Holdco Corporation (via Sonesta International Hotels Corporation)
- 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
- vs $51.1M prior year
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)
- Headquarters
- Massachusetts
- Founded
- 1986
- FDD year
- 2026
- States available
- 14
Can you afford it, and what does the money buy?
Source: FDD 2026 · Items 5–7
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- N/A
- All-in to open one unit
- Liquid capital req'd
- $526K – $1.8M
- Middle of category vs category
- Franchise fee
- $75K – $75K
- Middle of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.0% |
| Technology fee | $9 |
| Training fee | $5K |
| Transfer fee | $75K |
| Renewal fee | $75K |
| Inventory (initial) | $900K – $3.5M |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for Red Lion Hotels 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 Red Lion Hotels 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, other operating costs and initial investment, 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
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.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
5.0% royalty + 3.0% ad fund.
Disclosure
No Item 19 revenue figure is on file, and we have not established what this brand's FDD discloses. Item 20 lists current and former franchisees, the usual source for unit economics.
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 Red Lion Hotels Compares
Is the system healthy?
Source: FDD 2026 · 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.
Item 12 · 14 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
14
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 23
- Loan volume
- $56.2M
- Median loan
- $2.4M
- 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
- 0.0%
- Loans approved 2021+
- Active lenders
- 17
- Defaults
- 0
- Typical loan rate
- 6.3%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7211
- Jobs supported
- 233
- 0.4 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 14% went to startups / new businesses, 86% to established operators
Top lenders financing Red Lion Hotels franchisees
Showing 3 of 17 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 Red Lion Hotels'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 13 states
- Startup risk premium and job creation velocity
- 8-year lending trend
Instant access. No subscription.
With a 0.0% charge-off rate across 23 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
Litigation (Item 3)
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).
Largest disclosed settlement: $500,000
Bankruptcy (Item 4)
Disclosed in last 7 years
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)
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: 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 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 | 20 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| 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 |
| Mandatory arbitration | Yes |
| Arbitration location | Within 50 miles of franchisor's principal place of business (currently Newton, Massachusetts) |
| Governing law | Massachusetts |
| Litigation count | 23 |
View Item 3 litigation summary
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).
Items 10, 11
Training & 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 & 11
Franchisor Support
Technology: Restaurant Point of Sale (POS)
Frequently asked questions
Frequently Asked Questions
What do Red Lion Hotels franchise owners earn?
No average owner earnings figure for Red Lion Hotels 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 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. FranchiseVerdict extracts these figures directly from the Red Lion Hotels FDD and qualifies whose outlets they describe.
What is Red Lion Hotels's franchise failure rate?
Based on SBA 7(a) loan data, Red Lion Hotels has a charge-off rate of 0.0% across 23 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.
Is Red Lion Hotels a good franchise to buy?
FranchiseVerdict rates Red Lion Hotels as a C-grade franchise with a verdict score of 45 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.