Quick Verdict · who it fits
Red Roof Franchising, LLC fits first-time franchise buyers looking for a mature hospitality concept.
The numbers a buyer needs first — straight from the filing.
Initial investment (Item 7)
$7.3M - $15.8M
Franchise fee (Item 5)
$27K
Royalty (Item 6)
5% + 4% ad
System size (Item 20)
596 +37
Years in business
19+ yrs
Item 3 litigation
3 suits
Buyer qualifications
Data extracted from the 2026 FDD filed with state regulators. Fees and terms may have changed since filing — request the current FDD from the franchisor before deciding. Not legal, financial, or investment advice. Full disclaimer.
Drag to your projected annual sales. Royalty 5% + ad fund 4% on gross sales.
PROJECTED ANNUAL SALES$500,000
$100k$2M
Royalty (5%)
—
Ad fund (4%)
—
Total / year
—
▪ Of-sales fees only · excludes rent, labor, COGS, and one-time costs · for illustration
Free AI summary — the first read on the filing.
623
Total units open
596 franchised + 27 affiliate-owned as of December 31, 2025
37 franchised units opened in 2025
Units opened last year
25 franchised units closed/terminated in 2025
Units closed last year
12 franchised units
Net unit growth
584 to 596
What our analysis flagged across the 2026 filing.
5
Risks to review
4
Strengths identified
5
Questions to ask
How Red Roof ranks against 80 Hospitality & Travel peers we've analyzed.
Initial investment
72nd pct · of 80 peers
Franchise fee
37th pct · of 80 peers
System size
89th pct · of 80 peers
Hospitality & Travel industry averages
Avg investment
$7.2M - $21.8M
Avg franchise fee
$38K
Avg system size
239
Franchises analyzed
80
Closest concepts by category and investment.
| Brand | Item 19 | Fee | Investment | Royalty | Units |
|---|---|---|---|---|---|
| Red Roof | Disclosed | $27K | $7.3M - $15.8M | 5% | 596 |
| Dollar Rent A CarSimilar price | Disclosed | $25K | $879K - $15.9M | 6–8% | 66 |
| CpBiggest system | Disclosed | $11K | $2K - $21K | 1.5–3% | 3,124 |
| TaTop-rated in category | None | $140K | $1.5M - $14.1M | 2–4.5% | 33 |
Free explainers to go deeper before you sign.
Red Roof Franchising, LLC requires a $27,000 initial franchise fee and a total initial investment range of $7,253,500–$15,836,090, per the most recent FDD on file.
Yes. Red Roof Franchising, LLC discloses Item 19 financial performance representations in its FDD. See the financials sub-page for the disclosed figures.
Franchisees pay a royalty of 5% and an advertising fund contribution of 4% of Gross Room Revenues on gross sales as defined in Item 6 of the FDD.
As of their 2026 FDD, Red Roof Franchising, LLC has 596 total locations, with 37 new locations opened in the most recent reporting year. This information comes from Item 20 of the FDD.
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