FDD-based startup cost, franchise fee, revenue, profit, SBA default rate, and investment risk signals for Red Roof Inn.
Based on 2024 FDD · 1 filing in corpus
Cost and profit at a glance
Based on FDDIQ's FDD corpus, a Red Roof Inn franchise shows an estimated initial investment of $5.9M – $7.4M. The franchisor does not provide enough Item 19 data for a clean profit estimate. Use the links below to compare the cost, revenue, SBA loan history, and ROI against other franchises before you request the full FDD.
Quick fee read: $27K franchise fee · 9% royalty/ad burden. These figures are directional screening data, not a substitute for reading the current FDD and speaking with existing operators.
Red Roof Inn requires a total initial investment of $5.9M to $7.4M (midpoint approximately $6.7M), with an initial franchise fee of $27K. The ongoing fee burden is 9% (5% royalty plus 4% advertising fund). This is below the industry average of approximately 22.3%, leaving more margin for the operator.
Red Roof Inn does not publicly disclose Item 19 financial performance data in their FDD. This is a significant transparency gap — franchisees must rely on validation calls and personal research rather than audited financial representations. Prospective buyers should demand current unit-level financials from existing operators during due diligence.
Red Roof Inn operates approximately 561 franchised units. The brand is growing, with a 4.2% net unit increase year-over-year, indicating franchisee demand and system health. The SBA 7(a) loan default rate of 0.9% is well below the industry average of approximately 4.9%, indicating strong franchisee financial outcomes.
Prospective franchisees should verify all figures against the most recent FDD, conduct validation calls with multiple existing franchisees, and consult with a franchise attorney before signing any agreement.
Analysis based on 2024 FDD filing. FDDIQ Editorial Team · Methodology
Estimated using sector-average margins. Actual franchise economics vary by location, operator, and market conditions.
Industry averages based on FranchiseIQ corpus benchmarks. ▲ = better than avg, ▼ = worse.
Real lending data from SBA 7(a) loans (2010-2026). 373 loans across 34 states.
Source: SBA 7(a) loan data via FOIA. Default rate = charged-off loans / total originated. Industry avg default rate ~7.2%.
Common questions buyers ask about Red Roof Inn, answered from FDD and SBA data.
The total initial investment for a Red Roof Inn franchise ranges from $5.9M to $7.4M, according to their Franchise Disclosure Document.
Red Roof Inn charges a 5% royalty fee on gross sales.
The initial franchise fee for Red Roof Inn is $27,000.
There are approximately 561 Red Roof Inn franchise locations as of 2023.
Profit data for Red Roof Inn is disclosed in FDD Item 19 (Financial Performance Representation). Check their most recent Franchise Disclosure Document for current figures.
Red Roof Inn has an SBA loan default rate of 0.9% based on SBA 7(a) loan data.
Whether a Red Roof Inn franchise is worth it depends on total startup cost, royalty burden, FDD Item 19 economics, SBA loan performance, and local operator execution. FDDIQ compares these signals against similar franchises so buyers can screen the opportunity before paying for diligence.
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