How Much Does a Red Roof Inn Franchise Cost?
Data from the 2025 Franchise Disclosure Document
Investment Summary
Total Investment
$259K – $14.8M
Franchise Fee
$27K
Royalty
5.0%
Ad Fund
4.0%
Cost Breakdown
Initial Franchise Fee
The initial franchise fee for Red Roof Inn is $27K. This one-time payment covers the right to operate under the brand, access to proprietary systems, and initial training programs.
Total Investment Range
Opening a Red Roof Inn franchise requires a total investment of $259K – $14.8M. This range typically includes real estate or leasehold improvements, equipment and fixtures, initial inventory, signage, insurance, and working capital to sustain operations during the ramp-up period.
Working capital alone ranges from $112K to $154K.
Ongoing Costs
Beyond the initial investment, Red Roof Inn franchisees pay ongoing fees. The royalty fee is 5.0% of gross sales (Gross Room Revenues). The advertising or brand fund contribution is 4.0% of gross sales. There is also a technology fee of $6K.
Net Worth & Liquid Capital Requirements
Red Roof Inn requires working capital of $112K – $154K to cover initial operating expenses. This is the liquid cash you should have available beyond the franchise fee and buildout costs.
What Can You Earn?
Red Roof Inn does not disclose earnings data in Item 19 of its Franchise Disclosure Document. Not all franchisors choose to publish financial performance representations, though this is a data point many prospective franchisees consider important.
How Do Banks View Red Roof Inn?
SBA Loans Issued
361
Default Rate
1.5%
The SBA (Small Business Administration) tracks loan performance for franchise brands. Red Roof Inn has 361 SBA-backed loans on record. The default rate is 1.5%, which is below the franchise industry average, indicating relatively lower lending risk. A lower default rate generally indicates that lenders view the franchise as a safer investment, though past performance does not guarantee future results.
Next Steps
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