Sleep InnFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Sleep Inn franchise requires a total initial investment of $7.4M – $9.4M, including a $3K franchise fee and an ongoing 5.5% royalty[2]. The 2024 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 10.6% charge-off rate across 382 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $7.4M – $9.4M
- 35th pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 5.5%
- 31st pct Lodging
- Units
- 427
- 46th pct Lodging
- SBA default
- 10.6%
- 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 1987. Systems this mature have refined operations and brand recognition.
92 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $7.4M – $9.4M including a $3K franchise fee, 5.5% ongoing royalty.
- Item 19 discloses "Average Occupancy, ADR, and RevPAR" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict A (Top Quintile) with a risk score of 43/100. SBA loan charge-off rate of 10.6% across 382 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 92 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.
- Parent company
- Choice Hotels International, Inc.
- Incorporated in
- DE
- HQ
- 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $1.1B
- vs $1.4B prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Sleep Inn franchisees operate limited-service hotel properties, managing guest check-in/check-out, housekeeping, maintenance, and front desk operations. Daily activities include revenue optimization through occupancy and rate management, maintaining brand standards, and paying 5.5% royalties on room revenues to the franchisor. Franchisees bear full responsibility for staffing, supplies, property upkeep, and local marketing within unprotected territory.
- CEO
- Patrick S. Pacious
- Headquarters
- MD
- Founded
- 1963
- FDD year
- 2024
- States available
- 43
FDD Item 7 · 2024 filing · 22 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Affiliation Feenot refundable | $40K | $45K | |
| Architectural Plans & Inspections | $90K | $150K | |
| Legal Fees | $10K | $40K | |
| Environmental Impact Study (if necessary) | $0 | $16K | |
| Market Study | $10K | $15K | |
| Construction (excluding soft costs) | $6.0M | $6.9M | |
| Equipment for food preparation, fitness and laundry facilities | $130K | $200K | |
| Insurance | $45K | $175K | |
| Pre-Opening Advertising | $5K | $50K | |
| Furniture, Fixtures & Equipment | $630K | $773K | |
| Hardware required to operate property management systemnot refundable | $4K | $11K | |
| choiceADVANTAGE Software License and Systems Training Feesnot refundable | $9K | $11K | |
| Opening Inventory of Supplies | $182K | $280K | |
| Orientation and Hospitality Training Feesnot refundable | $1K | $3K | |
| High Speed Internet Access for in-room, in-lobby, public areas and meeting rooms | $10K | $20K | |
| Mandatory On-Premises Signs | $20K | $80K | |
| Interior design waiver feenot refundable | $0 | $15K | |
| Architectural Design Review & Construction Servicesnot refundable | $0 | $15K | |
| Pre-Opening Photographynot refundable | $1K | $3K | |
| Design and engineering costs and inspections | $100K | $180K | |
| Total initial investment | $7.4M | $9.4M |
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
- $7.4M – $9.4M
- Better than avg vs category
- Liquid capital req'd
- $175K – $345K
- Better than avg vs category
- Franchise fee
- $3K – $92K
- Better than avg vs category
- Royalty
- 5.5%
- Gross Room Revenues · typical 6–8%
- Ad fund
- 3.5%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.5% of gross sales |
| Marketing / ad fund | 3.5% of gross sales |
| Technology fee | $472 |
| Transfer fee | $45K |
| Renewal fee | $45K |
| Total fee load | 9.0% of rev |
Financial Performance
This brand's FDD disclosed "Average Occupancy, ADR, and RevPAR" 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 Sleep Inn Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 427
- Opened
- 13
- Last reporting year
- Closed
- 9
- Turnover rate
- 2.1%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- +0.9%
- Net unit change last year
- 3-yr CAGR
- +3.1%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 4
- Closed (3yr)
- 5
- Terminated (3yr)
- 1
- Non-renewed (3yr)
- 2
- Transfers (3yr)
- 21
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 0.7%
- Franchisor-initiated terminations
- Ceased ops
- 1.2%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 32 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
- 382
- Loan volume
- $770.6M
- Median loan
- $2.0M
- average
- Charge-off rate
- 10.6%
- 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)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 97
- Defaults
- 23
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Sleep Inn presents high-risk investment characteristics marked by litigation exposure, stagnant growth, franchisee financial distress signals, and missing performance data, suggesting systemic franchisor-franchisee relationship problems.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
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
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 43 / 100 rating
- 01MINORStagnant unit growth (0.9% YoY) suggests market saturation, weak support, or franchisee dissatisfaction in a mature 427-unit system
- 02MINORMultiple pending class-action lawsuits alleging discriminatory practices and anti-competitive behavior raise questions about franchisor ethics and potential future liability exposure
- 03MINOR84 royalty recovery actions initiated in prior fiscal year indicates systematic franchisee distress, cash flow problems, or aggressive franchisor collection tactics
- 04MINORNo average revenue or net income disclosure (Item 19 absent) prevents validation of investment ROI claims and suggests weak system performance
- 05MINORUnprotected territory creates direct competition risk; combined with stagnant growth, new units may cannibalize existing franchisee revenues
- 06MINORMultiple settled disputes involving rate concessions and cash payments suggest franchisor has material disputes about contract terms and fairness
- 07HIGHGoing Concern status 'False' with declining unit trajectory and litigation exposure raises long-term viability concerns
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 | 4 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Maryland |
| Litigation count | 92 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 65 hrs
- On-the-job training
- 16 hrs
- Training location
- On-site and franchisor location
- Site selection
- joint
- 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
100 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Sleep Inn · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Sleep Inn franchise?
The total investment to open a Sleep Inn franchise ranges from $7.4M – $9.4M, with an initial franchise fee of $3K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Sleep Inn franchise owners earn?
Sleep 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 Sleep Inn's franchise failure rate?
Based on SBA 7(a) loan data, Sleep Inn has a charge-off rate of 10.6% across 382 loans, meaning 10.6% 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 Sleep Inn franchise locations are there?
As of their most recent FDD filing, Sleep Inn has 427 total units in the United States, including 414 franchised units and 0 company-owned units. 13 new units were opened in the latest reporting year.
Is Sleep Inn a good franchise to buy?
FranchiseVerdict rates Sleep Inn as a A-grade franchise with a risk score of 43 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.
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.