Suburban StudiosFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Suburban Studios franchise requires a total initial investment of $8.5M – $11.1M, including a $30K franchise fee and an ongoing 6.0% royalty[2]. The 2024 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 0.0% charge-off rate across 29 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $8.5M – $11.1M
- 36th pct Lodging
- Avg gross sales
- N/A
- 2nd pct Lodging
- Royalty
- 6.0%
- 39th pct Lodging
- Units
- 104
- 36th pct Lodging
- SBA default
- 0.0%
- 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
Only 0.0% of 29 SBA loans charged off, well below the 16% franchise average.
The system grew 39% year-over-year. Fast growth means demand, but can strain support.
Bottom line
- Total investment $8.5M – $11.1M including a $30K franchise fee, 6.0% ongoing royalty.
- Item 19 discloses "Actual" rather than annual gross sales, so unit revenue is not directly comparable.
- Verdict A (Top Quintile) with a risk score of 51/100. SBA loan charge-off rate of 0.0% across 29 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System growing at 46.5% CAGR over 3 years with 104 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Choice Hotels International, Inc.
- Parent company
- None
- Incorporated in
- DE
- HQ
- 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $1.4B
- vs $1.5B prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Suburban Studios franchisees operate boutique hotel properties, managing daily guest services, housekeeping, front desk operations, and revenue management across their protected territory. Franchisees generate revenue primarily from room bookings and are obligated to pay 6.0% of gross room revenues to the franchisor regardless of profitability.
- CEO
- Patrick S. Pacious
- Headquarters
- MD
- Founded
- 1963
- FDD year
- 2024
- States available
- 30
FDD Item 7 · 2024 filing · 18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Affiliation Fee | $40K | — | |
| Architectural Plans & Inspections | $60K | $150K | |
| Legal Fees | $10K | $45K | |
| Environmental Impact Study (if necessary) | $0 | $16K | |
| Market Study | $3K | $15K | |
| Construction (excluding soft costs) | $7.2M | $8.8M | |
| Insurance | $45K | $185K | |
| Pre-Opening Advertising | $5K | $50K | |
| Furniture, Fixtures & Equipment | $609K | $744K | |
| Hardware to operate the choiceADVANTAGE property management systemnot refundable | $4K | $11K | |
| choiceADVANTAGE Software License and Systems Onboarding Feesnot refundable | $5K | $7K | |
| Opening Inventory of Supplies | $202K | $339K | |
| Orientation and Hospitality Training Feesnot refundable | $2K | $3K | |
| High Speed Internet Access for in-room, in-lobby, public areas and meeting rooms | $14K | $25K | |
| Mandatory On-Premise Signs | $20K | $80K | |
| Design and engineering costs and inspections | $100K | $180K | |
| Working Capital Required Before Operations Begin | $145K | $350K | |
| Additional Funds for 3-Month Initial Period | $50K | $75K | |
| Total initial investment | $8.5M | $11.1M |
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
- $8.5M – $11.1M
- Better than avg vs category
- Liquid capital req'd
- $145K – $350K
- Better than avg vs category
- Franchise fee
- $5K – $30K
- Better than avg vs category
- Royalty
- 6.0%
- Gross Room Revenues · typical 6–8%
- Ad fund
- 2.5%
- typical 3–5%
- Total fee load
- 8.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.5% of gross sales |
| Transfer fee | $40K |
| Renewal fee | $40K |
| Inventory (initial) | $202K – $339K |
| Total fee load | 8.5% of rev |
Financial Performance
This brand's FDD disclosed "Actual" 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 Suburban Studios Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 104
- Opened
- 31
- Last reporting year
- Closed
- 2
- Turnover rate
- 1.9%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- +38.7%
- Net unit change last year
- 3-yr CAGR
- +46.5%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 29
- Closed (3yr)
- 6
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 4
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 1.5%
- Franchisor-initiated terminations
- Ceased ops
- 9.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 35 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
- 29
- Loan volume
- $83.7M
- Median loan
- $2.9M
- average
- 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)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 13
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
With a 0.0% charge-off rate across 29 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Suburban Studios presents elevated risk due to extreme capital requirements paired with zero financial transparency, active multi-jurisdictional litigation, and explosive growth rates that may mask underlying unit economics 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 51 / 100 rating
- 01MEDMassive capital requirement ($8.5M–$11.1M) with no disclosed average revenue or net income data to validate ROI potential
- 02HIGHMultiple active litigation cases including class action suit, anti-competitive practice claims, and civil rights violations suggesting systemic operational or governance issues
- 03MINORAggressive unit growth of 38.7% YoY raises sustainability concerns and may indicate recruitment-heavy expansion rather than organic profitability
- 04MINORNo Item 19 financial performance disclosure prevents independent verification of franchisee profitability claims
- 05MINOR6.0% royalty on gross room revenues creates fixed cost burden regardless of net profitability, particularly concerning given lack of income transparency
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 |
| Territory type | Radius or geographically defined area |
| Protected territory | Yes |
| 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 | 4 |
| Curable defaultsℹ | 6 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Maryland |
| Litigation count | 7 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 50 hrs
- On-the-job training
- 105 hrs
- Training location
- On-site and corporate
- 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
90 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Suburban Studios · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Suburban Studios franchise?
The total investment to open a Suburban Studios franchise ranges from $8.5M – $11.1M, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Suburban Studios franchise owners earn?
Suburban Studios 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 Suburban Studios's franchise failure rate?
Based on SBA 7(a) loan data, Suburban Studios has a charge-off rate of 0.0% across 29 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.
How many Suburban Studios franchise locations are there?
As of their most recent FDD filing, Suburban Studios has 104 total units in the United States, including 75 franchised units and 0 company-owned units. 31 new units were opened in the latest reporting year.
Is Suburban Studios a good franchise to buy?
FranchiseVerdict rates Suburban Studios as a A-grade franchise with a risk score of 51 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.