Sleep Inn Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Sleep Inn is a Choice Hotels limited-service hotel franchise in the economy-to-midscale tier. Franchisees own and operate individual properties, running front desk, housekeeping, and revenue management on Choice's systems.
FranchiseVerdict summary · 2026
A Sleep Inn franchise requires a total initial investment of $7.4M – $9.4M, including a $3K – $92K franchise fee and an ongoing 5.5% royalty[2]. The 2024 FDD on file does not yield a unit-revenue figure we can publish. SBA 7(a) loans show a 3.4% charge-off rate across 207 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $7.4M – $9.4M
- 37th pct Lodging
- Avg gross sales
- N/A
- Projection
- Royalty
- 5.5%
- 39th pct Lodging
- Units
- 427
- 61st pct Lodging
- SBA charge-off
- 3.4%
- % 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 $7.4M – $9.4M including a $40K franchise fee, 5.5% ongoing royalty.
- RETURNSItem 19 discloses Average Occupancy Rate (59.4% avg), Average Daily Rate ($95.70 avg), and RevPAR ($56.85 avg) for the Performance Sample (412 of 427 hotels) for year ended Dec 31, 2023, plus a separate table for hotels newly constructed since 2016. No gross sales or net income figures are disclosed; costs/expenses are excluded.
- RISKVerdict B (Above average), verdict score 66/100 (higher is better). SBA loan charge-off rate of 3.4% across 207 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- LEGAL92 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
Corporate structure & franchisor financials
- Legal entity
- Choice Hotels International, Inc.
- Parent company
- Choice Hotels International, Inc.
- Predecessor
- Quality Courts Motels, Inc.
- Prior franchisor entity
- Incorporated in
- Delaware
- HQ
- 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $1.5B
- 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
- CEO
- Patrick S. Pacious
- Headquarters
- MD
- Founded
- 1963
- FDD year
- 2024
- States available
- 43
Can you afford it, and what does the money buy?
Entry cost runs 20% below the typical lodging franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown22 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
- Top 40% of category vs category
- Liquid capital req'd
- $125K – $270K
- Top 40% of category vs category
- Franchise fee
- $3K – $92K
- Top 40% of category vs category
- Royalty
- 5.5%
- 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 |
| Inventory (initial) | $182K – $280K |
| Total fee load | 9.0% of rev |
What do units actually make?
Source: FDD 2024 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for Sleep Inn 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 Sleep Inn 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 and other operating costs, 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: 2024 FDD
Financial Performance
Item 19 discloses Average Occupancy Rate (59.4% avg), Average Daily Rate ($95.70 avg), and RevPAR ($56.85 avg) for the Performance Sample (412 of 427 hotels) for year ended Dec 31, 2023, plus a separate table for hotels newly constructed since 2016. No gross sales or net income figures are disclosed; costs/expenses are excluded.
An occupancy metric, not unit revenue
- Item 19 type
- Average Occupancy, ADR, and RevPAR
- Sample size
- 412
- vs category median 98 · large
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
Compared against 175 Lodging brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 9.0% (near the Lodging average).
Disclosure
Item 19 reports Average Occupancy, ADR, and RevPAR rather than annual gross sales, so unit revenue is not directly comparable.
Operator retention
System roughly stable (+3.1% 3-year CAGR) with 427 units.
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 Sleep Inn Compares
Is the system healthy?
Source: FDD 2024 · Item 20
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 (3-yr)
- +3.1%
- Net unit change over 3 years
- 3-yr CAGR
- +3.1%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 13
- Closed (3yr)
- 8
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 1
- 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 12 · 43 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.
43
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
- 207
- Loan volume
- $551.3M
- Median loan
- $2.7M
- average
- Charge-off rate
- 3.4%
- 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)
- 96.6%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 97
- Defaults
- 4
- Typical loan rate
- 6.1%
- avg rate to borrowers
- vs industry
- N/A
- Jobs supported
- N/A
- Lender concentration
- 13%
- top lender's share
Vintage analysis
Sleep Inn charge-off rate by loan vintage
Top lenders financing Sleep Inn franchisees
Showing 3 of 97 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 Sleep 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 20 states
- Startup risk premium and job creation velocity
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 3.4% — 79% 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
Choice Hotels-owned 427-unit brand with very strong financials (revenue $1.54B, net income $258.5M) but three material pending matters: a Canadian class action, a ~90-owner RICO/antitrust suit, and another. Financials are pristine, but the active class-action/RICO litigation raises this above a single-flag score.
Litigation (Item 3)
Choice Hotels International (Sleep Inn franchisor) discloses 3 major pending litigation/arbitration matters as of the FDD date: a Canadian class action re: destination marketing fees (Knuth v. Radisson et al.), a large RICO/antitrust suit by ~90 franchise owners re: discriminatory practices (Jai Sai Baba v. Choice, stayed pending arbitration), and a breach-of-contract/trade-secrets suit (T&T Management v. Choice/Country Inn & Suites). Additionally, Item 3 lists numerous routine actions initiated by Choice to recover royalties and debts from individual franchisees.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young 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: No
- Restricted to system-approved products: No
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 66 / 100 verdict
- 01MINOR3 pending matters incl. RICO/antitrust and class action
- 02MINORVery strong financials (net income $258,507,000)
- 03MINORActive (not concluded) litigation
- 04MEDLarge 427-unit system, audited, Item 19 disclosed
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 2 |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Arbitration location | Maryland |
| Jury trial waiver | Yes |
| Governing law | Maryland |
| Litigation count | 92 |
View Item 3 litigation summary
Choice Hotels International (Sleep Inn franchisor) discloses 3 major pending litigation/arbitration matters as of the FDD date: a Canadian class action re: destination marketing fees (Knuth v. Radisson et al.), a large RICO/antitrust suit by ~90 franchise owners re: discriminatory practices (Jai Sai Baba v. Choice, stayed pending arbitration), and a breach-of-contract/trade-secrets suit (T&T Management v. Choice/Country Inn & Suites). Additionally, Item 3 lists numerous routine actions initiated by Choice to recover royalties and debts from individual franchisees.
Items 10, 11
Training & Operations
- Classroom training
- 65 hrs
- On-the-job training
- 16 hrs
- Training location
- On-site and franchisor location
- Ongoing training
- Required
- 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
377 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 $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Sleep Inn franchise owners earn?
No average owner earnings figure for Sleep Inn 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 Sleep Inn 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 Sleep Inn FDD and qualifies whose outlets they describe.
What is Sleep Inn's franchise failure rate?
Based on SBA 7(a) loan data, Sleep Inn has a charge-off rate of 3.4% across 207 loans, meaning 3.4% 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 427 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 B-grade franchise with a verdict score of 66 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.