The Red Collection Franchise Cost, Revenue & Review 2026
- Investment
- $221K – $1.6M
- Disclosed sales
- not disclosed
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
The Red Collection by Red Roof is an upscale-economy hotel franchise for conversions and new builds. Franchisees own and operate the hotels, managing front desk, housekeeping, and revenue under brand standards.
FranchiseVerdict summary · 2026
A The Red Collection franchise requires a total initial investment of $221K – $1.6M, including a $30K franchise fee and an ongoing 4.5% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored4 of 5 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $221K – $1.6M
- 11th pct Lodging
- Avg gross sales
- N/A
- Royalty
- 4.5%
- 2nd pct Lodging
- Units
- 5
- 17th pct Lodging
- SBA charge-off
- N/A
Quick verdict · Lodging · color = vs category peers
Green = favorable by >10% vs Lodging median · 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 $221K – $1.6M including a $30K franchise fee, 4.5% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict C (Average), verdict score 41/100 (higher is better).
- GROWTHFlat: no net change in franchised outlets in the latest year (1 opened, 1 closed); 3 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- The Red Collection, LLC
- Parent company
- Red Roof Franchising, LLC
- FDD Item 1, page 7 of the 2025 FDD
- Ultimate parent
- WRRH LP
- FDD Item 1, page 8 of the 2025 FDD
- Incorporated in
- Delaware
- HQ
- 7815 Walton Parkway, New Albany, Ohio 43054
- Auditor
- Plante & Moran, PLLC
- Audited financials
- Franchisor revenue
- $92.0M
- vs $94.2M prior year
Same owner · FDD Item 1, page 8
1 other brand on this site name WRRH LP as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Zack Gharib
- Headquarters
- OH
- Founded
- 2017
- FDD year
- 2025
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 90% below the typical lodging franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $112K | $154K |
| Equipment, build-out, other | $79K | $1.4M |
| Total initial investment | $221K | $1.6M |
Source: The Red Collection 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $221K – $1.6M
- Top 40% of category vs category
- Liquid capital req'd
- $112K – $154K
- Top 40% of category vs category
- Franchise fee
- $30K – $30K
- Top 40% of category vs category
- Royalty
- 4.5%
- typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 7.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.5% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $15K |
| Training fee | $1K |
| Transfer fee | $15K |
| Renewal fee | $50 |
| Inventory (initial) | $8K – $49K |
| Total fee load | 7.5% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
The Red Collection makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. 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 The Red Collection 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: 2025 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
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 7.5% (near the Lodging median).
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
Net unit growth of +66.7% over 3 years (1 opened, 1 closed).
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 medians
How The Red Collection Compares
Category median of published Lodging brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 5
- Opened
- 1
- Last reporting year
- Closed
- 1
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 20.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +66.7%
- Net unit change over 3 years
- 3-yr CAGR
- +66.7%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 1
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 3
- 0.60 per open outlet · Item 20 Table 5
- Projected new
- 2
- Franchisor's next-year forecast
- Termination rate
- 20.0%
- Franchisor-initiated terminations
- Ceased ops
- 20.0%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 3 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.
3
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Financials are parent-level (net worth $26.6M), so brand equity is not judged directly. One affiliate litigation matter (Red Roof affiliate NJFPA suit, plus a 2014 consent order) and an old disclosed prior-affiliate bankruptcy (ASTECH, via a GC's former employer, liquidation confirmed 2024). These are peripheral/old, so a single minor concern.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
One pending franchisee lawsuit (HP Holding LLC v. Red Roof Inns, Inc.) alleging breach of contract, tortious interference, and NJFPA violations; one concluded Maryland Securities Division inquiry into franchise activities
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
In re ASTECH Engineered Products, Inc., Case No. 22-10635-BLS (Bankr. Del.), Chapter 11 filing on July 15, 2022, plan of liquidation confirmed May 20, 2024
Audited financials (Item 21)
Yes · Plante & Moran, PLLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Franchisor (TRC) 2024 annual revenue of $492,846, distinct from parent RRF's consolidated revenue of $91,958,435 (2024). Item 8 states the franchisor's own total revenue as $492,846 (FY ending 2024-12-31); the statements above are the parent's.
ⓘ 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: Yes
- 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 41 / 100 verdict
- 01HIGHAffiliate litigation (HP Holding v. Red Roof, NJFPA)
- 02HIGHOld prior-affiliate bankruptcy (ASTECH, unrelated GC connection)
- 03MINORParent-level financials, net worth $26,620,489
- 04MINORNo Item 19 disclosure; small 5-unit system
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Exclusive territory |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory sizeℹ | variable (1-2 city blocks to a small town) |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Ohio |
| Litigation count | 4 |
View Item 3 litigation summary
One pending franchisee lawsuit (HP Holding LLC v. Red Roof Inns, Inc.) alleging breach of contract, tortious interference, and NJFPA violations; one concluded Maryland Securities Division inquiry into franchise activities
Items 10, 11
Training & Operations
- Classroom training
- 37 hrs
- On-the-job training
- 7 hrs
- Training location
- Mixed (Live Webinar, On Demand Learning Module, Your Hotel)
- Ongoing training
- Required
- Field support
- 9 hrs/yr
- On-site visits per year
- Franchisor financing
- Not offered
- Item 10
- POS system
- Reservation Platform / PMS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Reservation Platform / PMS
Item 20 · call current owners
Franchisee Contacts
11 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a The Red Collection franchise?
The total investment to open a The Red Collection franchise ranges from $221K – $1.6M, 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 The Red Collection franchise owners earn?
The Red Collection makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns The Red Collection?
The Red Collection is franchised by The Red Collection, LLC. Its parent company is Red Roof Franchising, LLC. The ultimate parent named in the FDD is WRRH LP. Source: FDD Item 1, 2025 filing.
What is Item 19 in the The Red Collection 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 The Red Collection FDD and qualifies whose outlets they describe.
What is The Red Collection's franchise failure rate?
SBA 7(a) loan charge-off data is not available for The Red Collection (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many The Red Collection franchise locations are there?
As of their most recent FDD filing, The Red Collection has 5 total units in the United States, including 5 franchised units and 0 company-owned units. 1 new units were opened in the latest reporting year.
Is The Red Collection a good franchise to buy?
FranchiseVerdict rates The Red Collection as a C-grade franchise with a verdict score of 41 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.