Rodeway InnFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A RODEWAY INN franchise requires a total initial investment of $109K – $702K, including a $25K 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 4.0% charge-off rate across 339 loans[1]. Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $109K – $702K
- 6th pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.0%
- 4th pct Lodging
- Units
- 432
- 47th pct Lodging
- SBA default
- 4.0%
- 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.
98 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $109K – $702K including a $25K franchise fee, 5.0% ongoing royalty.
- Item 19 discloses "Performance Sample" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict C (Average) with a risk score of 63/100. SBA loan charge-off rate of 4.0% across 339 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 98 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
- Choice Hotels International, Inc.
- CEO title
- Director, President and Chief Executive Officer
- Patrick S. Pacious
- Incorporated in
- DE
- HQ
- 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $1.5B
- vs $1.6B prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Franchisees operate budget-hotel properties under the Rodeway Inn brand, managing day-to-day operations including housekeeping, front desk, maintenance, and guest services. Primary revenue comes from nightly room rates, with franchisees responsible for local marketing, staffing, and compliance with brand standards while paying the franchisor 5% of gross room revenues monthly.
- CEO
- Patrick S. Pacious
- Headquarters
- MD
- Founded
- 1939
- FDD year
- 2026
- States available
- 48
FDD Item 7 · 2026 filing · 13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Affiliation Fee | $25K | — | |
| Property Improvements | $42K | $326K | |
| Insurance | $3K | $88K | |
| Advertising | $3K | $40K | |
| Brand in a Boxnot refundable | $12K | $30K | |
| Opening Inventory of Supplies | $10K | $67K | |
| Permits, Licenses and Government Fees | — | — | |
| Immersion and Hospitality Training Feesnot refundable | $3K | $5K | |
| Mandatory On-Premise Signs | $20K | $100K | |
| Interior Design Waiver Feenot refundable | $0 | $20K | |
| Revenue Management Setup and Training Feenot refundable | $2K | $2K | |
| Working Capital Required Before Operations Begin | $10K | $25K | |
| Additional Funds for 3-Month Initial Period | $10K | $25K | |
| Total initial investment | $139K | $727K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $109K – $702K
- Better than avg vs category
- Liquid capital req'd
- $20K – $50K
- Better than avg vs category
- Franchise fee
- $25K – $25K
- 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 | $400 |
| Training fee | $5K |
| Transfer fee | $15K |
| Renewal fee | $15K |
| Inventory (initial) | $9K – $62K |
| Total fee load | 8.5% of rev |
Financial Performance
This brand's FDD disclosed "Performance Sample" 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 Rodeway Inn Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 432
- Opened
- 35
- Last reporting year
- Closed
- 50
- Turnover rate
- 11.6%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 22.2%
- Net growth (yr3)
- -3.4%
- Net unit change last year
- 3-yr CAGR
- -8.5%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 35
- Closed (3yr)
- 66
- Terminated (3yr)
- 15
- Non-renewed (3yr)
- 4
- Transfers (3yr)
- 15
- Projected new
- 22
- Franchisor's next-year forecast
- Transfer rate
- 3.5%
- Owners selling to other franchisees
- Termination rate
- 4.4%
- Franchisor-initiated terminations
- Ceased ops
- 15.3%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 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
- 339
- Loan volume
- $520.7M
- Median loan
- $1.4M
- 50th percentile
- Charge-off rate
- 4.0%
- 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
- 3.3%
- Loans approved 2021+
- Active lenders
- 103
- Defaults
- 7
Vintage analysis
Rodeway Inn 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 Rodeway Inn'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
- 8-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
Rodeway Inn exhibits high-risk characteristics including system contraction, material litigation against the franchisor, missing financial disclosures, and unprotected territories—suggesting operational instability and unfavorable unit economics.
Litigation (Item 3)
Three pending cases: (1) Norma Knuth v. Radisson Hotels International, Inc. - Class action in Saskatchewan alleging wrongful collection of undisclosed destination marketing fees; class not yet certified; anticipated dismissal pending; (2) Jai Sai Baba, LLC, et al. v. Choice Hotels International, Inc. - Approximately 90 franchisees alleging discriminatory, anti-competitive practices and violations of RICO, Sherman Act, Civil Rights Act, and state franchise laws; case stayed pending individual arbitration as of March 19, 2021; (3) T&T Management, Inc. v. Choice Hotels International, Inc. and Country Inn & Suites by Radisson, Inc. - Licensee alleging breach of license agreement, breach of implied covenant of good faith and fair dealing, and misappropriation of guest data under Defend Trade Secrets Act; filed June 26, 2023; motion to dismiss filed November 6, 2023.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 63 / 100 rating
- 01MINORDeclining unit count (-3.4% YoY) indicates system contraction and weakening franchisee profitability
- 02HIGHMultiple pending civil litigation alleging regulatory violations and discrimination suggests operational/compliance issues at corporate level
- 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and suggests franchisor may be hiding poor unit economics
- 04MINORUnprotected territory creates direct competition risk; franchisees can cannibalize each other's revenue
- 05HIGHLitigation includes collection actions against former franchisees, indicating cash flow distress among operators
- 06MINOR5% royalty on GRR is reasonable but unsustainable if average unit volumes are below break-even threshold
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 | 20 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Protected territory | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Termination notice | 30 days |
| Termination groundsℹ | 2 |
| Curable defaultsℹ | 5 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Maryland |
| Litigation count | 98 |
View Item 3 litigation summary
Three pending cases: (1) Norma Knuth v. Radisson Hotels International, Inc. - Class action in Saskatchewan alleging wrongful collection of undisclosed destination marketing fees; class not yet certified; anticipated dismissal pending; (2) Jai Sai Baba, LLC, et al. v. Choice Hotels International, Inc. - Approximately 90 franchisees alleging discriminatory, anti-competitive practices and violations of RICO, Sherman Act, Civil Rights Act, and state franchise laws; case stayed pending individual arbitration as of March 19, 2021; (3) T&T Management, Inc. v. Choice Hotels International, Inc. and Country Inn & Suites by Radisson, Inc. - Licensee alleging breach of license agreement, breach of implied covenant of good faith and fair dealing, and misappropriation of guest data under Defend Trade Secrets Act; filed June 26, 2023; motion to dismiss filed November 6, 2023.
Items 10, 11
Training & Operations
- Classroom training
- 47 hrs
- On-the-job training
- 10 hrs
- Training location
- North Bethesda, Maryland
- Field support
- 0 hrs/yr
- On-site visits per year
- Site selection
- franchisor
- Franchisor financing
- Offered
- Item 10
- POS system
- choiceADVANTAGE
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: choiceADVANTAGE
Item 20 · call current owners
Franchisee Contacts
79 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
RODEWAY INN · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a RODEWAY INN franchise?
The total investment to open a RODEWAY INN franchise ranges from $109K – $702K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do RODEWAY INN franchise owners earn?
RODEWAY INN 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 RODEWAY INN's franchise failure rate?
Based on SBA 7(a) loan data, RODEWAY INN has a charge-off rate of 4.0% across 339 loans, meaning 4.0% 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.
How many RODEWAY INN franchise locations are there?
As of their most recent FDD filing, RODEWAY INN has 432 total units in the United States, including 432 franchised units and 0 company-owned units. 35 new units were opened in the latest reporting year.
Is RODEWAY INN a good franchise to buy?
FranchiseVerdict rates RODEWAY INN as a C-grade franchise with a risk score of 63 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.