How much does a Red Roof Inn franchise cost?
The 2026 Red Roof Inn Franchise Disclosure Document does not give one universal startup range. It gives nine separate Item 7 ranges for different brands, room counts, construction paths, and dual-brand structures. A 65-room single-brand conversion is disclosed at $264,850 to $1,695,600, depending on the Red Roof format. An 82-room single-brand new build is disclosed at $7,253,500 to $8,923,100. The 120-room dual-brand conversion range is $693,268 to $2,284,813, while 140-room dual-brand new builds range from $13,569,518 to $15,860,090.
Those totals include the disclosed Application Fee, Initial Franchise Fee, required systems, training, opening inventory, insurance, and three months of Additional Funds. They do not include land acquisition costs or rent for the hotel site. The correct budget therefore depends first on whether the project is a conversion, a new build, or a Dual Brand Hotel. Red Roof’s current official U.S. franchise information describes both conversions and new construction, but the financial figures below come from the current FDD.
Data basis: Red Roof Franchising, LLC, a Delaware limited liability company; Franchise Disclosure Document issued April 9, 2026; U.S. offers for Red Roof Inn, Red Roof Inn & Suites, Red Roof PLUS+, Red Roof PLUS+ & Suites, and specified Red Roof/HomeTowne Studios Dual Brand Hotels. Primary cost sources are Item 5, pp. 8–10; Item 6, pp. 10–19; and Item 7, pp. 19–37. Cost-relevant provisions in Items 8, 10, 11, and 17 were also reviewed. Information checked July 20, 2026. No matching current FDD was located on an official Red Roof-controlled public webpage, so FDD Item and page references are intentionally unlinked.
These are summary envelopes across incompatible 2026 Item 7 formats, not one franchise range. The lowest figure is a 65-room Red Roof Inn or Red Roof Inn & Suites conversion. The highest figure is a 140-room new-build Red Roof PLUS+/HomeTowne Studios Dual Brand Hotel. Land acquisition and hotel-site rent are outside the disclosed totals.
Source: 2026 FDD cover and Item 7, pp. 19–37.
Capital snapshot
Which Red Roof format matches each investment range?
The decisive cost variable is the development path. Red Roof’s official hotel conversion page explains that existing properties must meet current public-area, guest-room, exterior, logo, and signage standards. Its official new-build page describes a flexible 79-to-82-room prototype, while the FDD uses an 82-room assumption for single-brand new builds.
| 2026 Item 7 format | Room assumption | Estimated Initial Investment | FDD source |
|---|---|---|---|
| Red Roof Inn / Red Roof Inn & Suites conversion | 65 rooms | $264,850–$1,596,100 | Item 7, pp. 30–31 |
| Red Roof PLUS+ conversion | 65 rooms | $353,000–$1,659,100 | Item 7, pp. 31–32 |
| Red Roof PLUS+ & Suites conversion | 65 rooms | $357,000–$1,695,600 | Item 7, pp. 32–33 |
| Red Roof Inn / HomeTowne Studios Dual Brand conversion | 120 rooms | $693,268–$2,284,813 | Item 7, pp. 33–35 |
| Red Roof Inn / Red Roof Inn & Suites new build | 82 rooms | $7,253,500–$8,899,600 | Item 7, pp. 19–20 |
| Red Roof PLUS+ new build | 82 rooms | $7,267,500–$8,923,100 | Item 7, pp. 20–22 |
| Red Roof PLUS+ & Suites new build | 82 rooms | $7,267,500–$8,293,100 | Item 7, pp. 22–24 |
| Red Roof Inn / HomeTowne Studios Dual Brand new build | 140 rooms | $13,569,518–$15,836,090 | Item 7, pp. 24–26 |
| Red Roof PLUS+ / HomeTowne Studios Dual Brand new build | 140 rooms | $13,588,418–$15,860,090 | Item 7, pp. 26–27 |
A Dual Brand Hotel is not a larger version of the single-brand contract. It combines the Red Roof Inn or Red Roof PLUS+ portion with a HomeTowne Studios agreement, separate HomeTowne Studios initial fees, a second Reservation Platform / PMS arrangement, and HomeTowne Studios training expenses. The official Dual Brand information describes the shared lobby, common areas, and back-of-house concept, but a buyer must review both brands’ current disclosure documents before treating the total as complete.
How much uncertainty sits inside each disclosed range?
Each bar is the derived spread between the Item 7 high and low total. A wider bar means the format’s official range leaves more project-specific cost variation unresolved; it is not a ranking of quality or expected spending.
Source: Derived calculation from 2026 FDD Item 7 totals, pp. 19–37. Formula: disclosed high total minus disclosed low total. “RRI” means Red Roof Inn or Red Roof Inn & Suites where the FDD combines those brands.
What is included in the Red Roof initial investment?
Item 7 covers substantially more than the Initial Franchise Fee. For new builds, the largest entities are typically Facility Construction, Furniture, Fixtures, Equipment and Soft Goods, Site and Civil Work, design and testing, project management, and construction contingency. For conversions, the dominant variables are Facility Construction and/or Renovation and existing-property Furniture, Fixtures, Soft Goods and Equipment.
- Franchisor payments
- Application Fee, Initial Franchise Fee, Opening Package, Reservation Platform / PMS Software License Fee, training charges, and first-year cyber liability insurance reimbursement.
- Premises and construction
- New builds include design, testing, municipal fees, site and civil work, landscaping and irrigation, facility construction, construction contingency, and optional Owner Project Management. Conversions include required landscaping and property-specific renovation.
- Hotel assets
- Furniture, Fixtures, Equipment and Soft Goods; signage; Opening Inventory and Supplies; Guest Wi-Fi System; Voice Telephone System; and front-desk or back-office computer systems.
- Protection and readiness
- Utility Deposits for new builds, required insurance, Training Expenses, and three months of Additional Funds. Training travel, meals, and attendee wages are excluded from the Training Expenses line.
- Outside the total
- Land acquisition and hotel-site rent are not included. Taxes and freight for FF&E and taxes and shipping for computer systems are also excluded where specified. A manager’s apartment and swimming pool are outside the new-build construction assumption.
Which categories drive the 65-room Red Roof Inn conversion range?
The largest variation sits in renovation and FF&E. The chart uses the 2026 Item 7 range for a 65-room Red Roof Inn or Red Roof Inn & Suites conversion and a $650,000 scale.
Source: 2026 FDD Item 7, Table 6, pp. 30–31. Ranges are official FDD facts; bar positions are proportional renderings on a zero-based $650,000 scale.
The disclosed conversion total may include renovation spending that occurs after conversion.
Every converting property receives a Property Improvement Plan. The 2026 FDD says Red Roof Franchising, LLC may permit some construction, renovation, FF&E, and soft-goods work to be completed in phases. As a result, a conversion’s Item 7 total is an estimate of required investment, not necessarily the amount that must clear before the brand change date.
That timing distinction is specific to the conversion disclosures and should be reconciled against the property’s approved completion schedule. Item 7, Note 14, pp. 36–37.
Which fees are paid before opening, and when?
The first required payment is normally the $3,000 Application Fee. The $27,000 Initial Franchise Fee for a hotel with up to 100 rooms is due when the Franchise Agreement is signed, with another $300 for each room over 100. Additional payments are tied to systems, training, insurance, and readiness for opening. Item 5 states that most fees are nonrefundable, although fees are subject to negotiation when Red Roof Franchising, LLC determines that business circumstances warrant it.
| Item 5 payment | Amount | When paid | Important condition |
|---|---|---|---|
| Application Fee | $3,000 | With the Application | Refunded only in the limited rejection circumstances stated in Item 5; otherwise nonrefundable. |
| Initial Franchise Fee | $27,000 | When the Franchise Agreement is signed | Covers up to 100 rooms; add $300 per room above 100. Separate from the Application Fee. |
| Reservation Platform / PMS software license | $15,000 | Before opening | Nonrefundable; compatible computer hardware, installation, tax, and shipping can add cost. |
| RED Advantage Training | $1,000–$1,250 | Before opening | For the required initial virtual training of the Owner/Operator or General Manager. |
| New Owner Orientation | $1,000–$1,600 per person | Before opening or when required after a transfer | Travel, meals, wages, and other attendee expenses are additional. |
| Opening on-site training | $4,500–$5,000 | Upon completion | A trainer visits during the week before or the week of opening; rescheduling travel can be charged back. |
| First-year cyber liability insurance | About $550–$5,200 | Before opening | Red Roof procures the coverage and the franchisee reimburses the premium cost. |
| Re-Visit Fee | $2,250–$5,000 | Before opening authorization, if triggered | Applies when Red Roof visits after being told the hotel is ready and finds opening requirements unmet. |
The franchisor’s official training information confirms that the current program combines virtual instruction, on-demand materials, and on-site opening support. The FDD controls the fee amounts and expense exclusions.
- Before the ApplicationAn optional Market Study may cost $0 to $10,000 for new builds, and an optional Phase I Environmental Survey may cost up to $6,000 for a single-brand new build or $8,000 for a Dual Brand Hotel. A lender may require either study.
- With the ApplicationPay the $3,000 Application Fee for a single-brand project. The Dual Brand Item 7 tables use a $5,000 Red Roof application fee and a separate $5,000 HomeTowne Studios application fee.
- When agreements are signedPay the Initial Franchise Fee and execute the Franchise Agreement. Dual Brand Hotels also require the HomeTowne Studios agreement and its initial fee.
- During construction or renovationPay architects, engineers, municipalities, contractors, installers, and vendors as arranged or as assets are ordered. Conversion work may be phased under the Property Improvement Plan.
- Before opening authorizationFund required systems, computer hardware, signage, insurance, opening inventory, andtraining. A failed readiness visit can trigger the Re-Visit Fee before authorization.
- At and after openingUse the three-month Additional Funds allowance as expenses are incurred, begin invoice-based ongoing fees, and complete the professional photo shoot associated with the Opening Package.
Item 5 says the $2,500 Opening Package photo shoot occurs within 60 days after opening and is payable upon invoice. The Item 7 tables label the payment “Prior to Opening.” The amount is consistent, but the timing language is not. A buyer should obtain written confirmation of the invoice date and opening-photo deadline before finalizing the cash schedule.
What fees continue after a Red Roof hotel opens?
The main recurring system charges are the Royalty Fee, Marketing and Reservation Fee, RediRewards Preferred Member Program Fee, booking and distribution charges, and technology support. The FDD defines Gross Room Revenues broadly as room-rental receipts, whether collected or uncollected, with stated exclusions for employee gratuities and taxes collected for taxing authorities. It does not allow deductions for credit-card commissions, bad debts, or refunds to lodgers.
| Recurring fee | 2026 amount or basis | Payment timing | Scope |
|---|---|---|---|
| Royalty Fee | 5% of Gross Room Revenues | 20 days after invoice | A discretionary quality incentive may reduce the effective charge by up to 0.5 percentage point for a 12-month period if stated conditions are met. |
| Marketing and Reservation Fee | 4% of Gross Room Revenues | 20 days after invoice | Current rate; may increase to a maximum of 5%. |
| RediRewards Preferred Member Program Fee | 4% of Gross Room Revenues from Preferred Members | 20 days after invoice | Current rate; may increase to a maximum of 5% on written notice. |
| Distribution Listing Fees, Commissions and Rebates | 0%–25% of applicable net booking | 20 days after invoice | Reimburses travel-agency, online travel-agency, affiliate, processing, rebate, listing, and related distribution costs. |
| Booking Fees | $1.99–$7.00 per booking | 20 days after invoice | Rate depends on GDS, third-party internet, or direct-connect channel; rates may change. |
| Reservation Platform / PMS, Help Desk and Support | $490 per month + $3.85 per room per month | 20 days after invoice | May increase annually by up to 5%. |
| Desktop Protection and Maintenance | $200–$250 per device | Annually | Covers anti-virus, patching, web filtering, monitoring, and maintenance. |
| Revenue Management Software System | 0.3% of Gross Room Revenues | 20 days after invoice | Setup up to $250; monthly minimum $100 and maximum $400. |
| Digital Marketing Fee for SEO and localized marketing | $1,250 initially; $750 annually thereafter | Invoice date | For ongoing local listings and search-optimized property content. |
| RediResponse | $125–$250 | 20 days after invoice | Required reputation-management program; the FDD does not state a per-month or per-incident denominator in the fee table. |
Other repeat charges include Professional Photography Services of $750 to $2,199 when updated property images are required, annual cyber liability insurance of approximately $550 to $5,200, and an American Hotel & Lodging Association membership charge of $3 per room per year unless the franchisee opts out. Paying Red Roof by credit card adds a 2.8% transaction surcharge.
Red Roof’s official distribution information explains the reservation center, GDS, OTA, and RediCall channels. That page describes the operating infrastructure; the FDD establishes the franchisee’s fee basis.
Which program fees vary by booking source or participation?
Several Item 6 charges apply only to specific reservations, programs, or choices. A Mobile App Booking Fee is $1.75 per net booking. Consortia Participation can cost up to 20% of Gross Room Revenues generated by qualifying reservations. RediBill is 5% to 6% of centrally billed room revenue. The Digital Performance Marketing Program currently charges no less than 3% and may rise to 15% of applicable Gross Room Revenues from stays generated by covered digital marketing tactics.
The optional RediCall program charges $1.55 to $1.75 per call or $6 per confirmed reservation, with a $75 monthly minimum. RediCollect can charge up to 18% of collected virtual-credit-card revenue. The REDvenue Optimizer Program costs $525 to $1,195 monthly plus a possible quarterly bonus up to $300; it is generally optional, but required for a Dual Brand Hotel.
No advertising cooperative is currently operating, but Item 6 permits a future Cooperative Contribution of up to 1% of Gross Room Revenues for hotels located in a cooperative territory. Meetings and conferences currently cost $800 to $3,500 plus attendee expenses, and nonattendance can trigger an additional $500 to $2,500 charge.
Which fees are triggered by transfer, renewal, noncompliance, or unusual events?
Item 6 contains substantial event-triggered obligations that are not part of the ordinary monthly royalty calculation. These charges matter because they can arise during ownership, at a sale, during renewal, or after a default.
- TransferPay a $2,500 Transfer Application Fee when applying, plus a $15,000 Transfer Fee when the transaction closes. The transferee must also satisfy training, guarantee, current-standards, and agreement conditions.
- RenewalThe Renewal Fee is 50% of the then-current Initial Franchise Fee. Item 17 also requires payment of all monetary obligations, required upgrades, training, a release, and the then-current franchise agreement.
- Quality failuresOn-Site Quality Training costs $2,250 to $5,000. An On-Site Quality Audit starts at $2,500 and can double annually up to $10,000 if the required quality score is not restored.
- Insurance noncomplianceNotices can total up to $17,500 for each instance of noncompliance. If Red Roof procures coverage, the franchisee owes the premium plus an administrative fee up to $2,500.
- Late or failed paymentsA returned payment costs $50 or the legal maximum, whichever is less. Overdue amounts incur a $50 Late Fee plus the lesser of 1.5% per month or the maximum lawful rate.
- Alternate supplier requestThe Supplier Review Fee is $5,000, plus up to $5,000 for evaluation and testing. Item 8 says the charges apply whether or not the proposed supplier is approved.
- Unauthorized closure or remodelThe fee is $25,000 if the hotel stops operating at full capacity or begins an unauthorized remodel or renovation before the Franchise Agreement expires.
- Post-termination de-identificationContinued use of Red Roof intellectual property can cost $2,500 per day, plus attorneys’ fees if enforcement action is filed, after the specified sign-removal periods.
- Early termination damagesPre-opening Liquidated Damages are $100,000. Post-opening damages use the greater of $100,000 or a formula based on the prior Royalty Fee, Marketing and Reservation Fee, and RediRewards fee history and remaining contract term.
- Additional roomsThe Rooms Addition Fee is $450 per additional guest room when the Franchise Agreement amendment is signed.
The Renewal Fee is not the full renewal budget. Item 17 also ties renewal to upgrading requirements and the then-current Franchise Agreement, whose economics may differ from the original contract. The disclosed 50% fee formula should therefore be separated from any property renovation or system-upgrade obligation.
Does Red Roof disclose liquid capital, net worth, or financing?
The verified 2026 FDD does not state a numerical Liquid Capital, Net Worth, or Non-Borrowed Funds minimum. Those concepts should not be inferred from the Item 7 Estimated Initial Investment. The FDD cover also states that a spouse must sign a document making the spouse liable for financial obligations under the Franchise Agreement, even if the spouse has no ownership interest.
Item 10 states that Red Roof Franchising, LLC does not offer direct or indirect financing and will not guarantee a note, lease, or other obligation. Separately, a March 16, 2026 official company announcement says Red Roof partnered with Bridge, a digital financing platform intended to connect hotel owners and developers with a network of accredited lenders. That official financing-platform announcement does not amend Item 10, promise approval, or establish a required equity contribution.
- Request the current lender equity requirement. The FDD total is not a disclosed cash-down-payment figure.
- Separate land and hotel-site rent. Neither is included in the Item 7 totals.
- Price the Property Improvement Plan. Conversion ranges depend heavily on the existing building, FF&E, signage, Wi-Fi, telephone, and insurance status.
- Confirm all people-based training costs. New Owner Orientation is charged per person, while travel, meals, wages, and some rescheduling costs sit outside the Item 7 training estimate.
- Model booking-channel fees separately. Royalty, Marketing and Reservation, loyalty, OTA, GDS, mobile, RediBill, consortia, and digital-performance charges use different fee bases.
- Obtain written opening-payment dates. In particular, reconcile the Opening Package timing conflict between Item 5 and Item 7.
What is the most important budgeting takeaway?
A prospective Red Roof franchisee should not start with the brand-wide low and high figures. Start with the exact Item 7 table that matches the hotel: single-brand or Dual Brand, conversion or new build, Red Roof Inn or Red Roof PLUS+, and the FDD’s room-count assumption. Then add the excluded land or rent obligation, property-specific taxes and freight, training travel and wages, and any lender-required studies or reserves.
The 2026 FDD’s largest unresolved variable for a conversion is the condition and required upgrade schedule of the existing property. For a new build, the dominant costs are facility construction, site work, design, FF&E, and land outside the FDD total. In both paths, the $27,000 Initial Franchise Fee is only one small part of the capital requirement, and the ongoing Royalty Fee, Marketing and Reservation Fee, technology charges, booking fees, and conditional obligations continue after opening.
The Federal Trade Commission’s Consumer’s Guide to Buying a Franchise explains how Items 5, 6, and 7 fit into broader due diligence, while the FTC Franchise Rule describes the federal disclosure framework. The current FDD, the property-specific improvement plan, the Franchise Agreement, and written lender terms remain the controlling documents for the actual capital schedule.