Bottom line
- Total investment $7.4M – $9.4M including a $3K franchise fee, 5.5% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 222 loans (below the industry average).
- 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
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Sleep Inn unit return on the cash you put in?
Unlevered ROIC · per unit
1%
Below typical band (30–60%)
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.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
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.
Score breakdown · what drove the 63 / 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
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Sleep Inn · FDD (2024) PDF