How much does a Sleep Inn franchise cost in 2026?
The 2026 Sleep Inn Franchise Disclosure Document estimates $9,160,125 to $14,367,915 to construct and open an 84-room Sleep Inn & Suites hotel in the United States. That is the only complete Item 7 range disclosed. It is a new-construction estimate, not a conversion estimate, and it excludes land, real estate taxes, sitework, general conditions, general-contractor fees and several other locally variable costs.
The 2026 Item 7 range assumes an 84-guestroom Sleep Inn & Suites new-construction hotel. It includes $50,000–$75,000 of Additional Funds for the first three months after opening, but excludes the purchase or lease of real estate and real estate taxes. Source: 2026 Sleep Franchise Disclosure Document, Item 7, pp. 41–45.
Data basis. Legal franchisor: Choice Hotels International, Inc. FDD issuance date: April 1, 2026, amended May 20, 2026. Cost analysis uses Items 5, 6, 7, 8, 10, 11 and 17 for the U.S. Sleep Inn and Sleep Inn & Suites offer. Item 7 applies specifically to an 84-room Sleep Inn & Suites new-construction hotel. Information checked July 22, 2026. A matching current FDD was not located on an official franchise-controlled public website, so FDD citations below are unlinked by Item and page. See official U.S. Sleep Inn franchise information.
What is included in the $9.16 million to $14.37 million estimate?
The Item 7 total combines the Affiliation Fee, design and construction, hotel equipment, Furniture, Fixtures & Equipment, Opening Inventory of Supplies, technology, signage, training, Working Capital and Additional Funds. The largest disclosed component is Construction, at $7,812,000 to $11,951,000, but that construction line expressly excludes sitework, project-management fees, general-contractor profit and other soft costs.
Design, approvals and construction
| Cost entity | Disclosed amount | When paid | Paid to |
|---|---|---|---|
| Affiliation Fee | $300/room; $40,000 minimum | Application and no later than Franchise Agreement signing | Choice Hotels International, Inc. |
| Permits, Licenses and Government Fees | Varies | As incurred before opening | Contractor or local jurisdiction |
| Professional Design Services | $200,000–$450,000 | As incurred before opening | Architect, interior-design and engineering consultants |
| Legal Fees | $10,000–$40,000 | As incurred before opening | Attorneys |
| Feasibility, Market or Environmental Impact Study | $10,000–$35,000 | If necessary, before opening | Consultants |
| Construction, excluding soft costs | $7,812,000–$11,951,000 | As incurred before opening | General contractor |
Property, systems and opening supplies
| Cost entity | Low | High | Key qualification |
|---|---|---|---|
| Food-preparation, fitness and laundry equipment | $136,500 | $210,000 | Suppliers or Qualified Vendor |
| Insurance | $45,000 | $175,000 | Construction and required operating coverages |
| Pre-Opening Advertising | $5,000 | $50,000 | Various advertising media |
| Furniture, Fixtures & Equipment | $603,900 | $836,300 | Excludes taxes, shipping and installation |
| Brand in a Box | $15,150 | $30,000 | Mandatory; excludes shipping |
| Opening Inventory of Supplies | $196,730 | $302,820 | Includes linen, housekeeping and operating supplies |
| Immersion and Hospitality Training Fees | $3,345 | $5,295 | Per person; owner and General Manager travel, lodging and meals are additional |
| High Speed Internet Access installation | $10,000 | $20,000 | New-construction wired solution estimate |
Signage, setup and operating capital
| Cost entity | Low | High | Timing or condition |
|---|---|---|---|
| Mandatory On-Premises Signs | $20,000 | $100,000 | Before opening; includes freight and installation |
| Interior Design Waiver Fee | $0 | $20,000 | Only if a waiver is requested |
| Architectural Design Review & Construction Services | $0 | $20,000 | Only if a non-prototypical design waiver is requested |
| Revenue Management Setup and Training Fee | $2,500 | $2,500 | Before opening |
| Working Capital Required Before Operations Begin | $125,000 | $270,000 | Before opening; includes essential personnel salaries, but the FDD does not state that owner compensation is included |
| Additional Funds for 3 Month Initial Period | $50,000 | $75,000 | After opening; recurring fees and other expenses |
| Total Estimated Initial Investment | $9,160,125 | $14,367,915 | Official Item 7 total |
Interpretation: outside Construction, Furniture, Fixtures & Equipment has the highest disclosed range, while Professional Design Services and Insurance show substantial spread. Official figures; no midpoint or average was calculated. Source: 2026 Sleep Franchise Disclosure Document, Item 7, pp. 42–45.
The published total does not resolve the cost of land or a lease, real estate taxes, sitework, general conditions, general-contractor fees or profit, project-management fees, loan origination points, permit amounts, or unusually high local development fees. The FDD says its experience with loan origination points has ranged from 1% to 2% of the amount borrowed, but the actual lender charge is not included in Item 7. Those exclusions can be material because Construction already represents most of the stated range.
When is the money paid?
The cash commitment begins with the application, expands at Franchise Agreement signing, and then moves through construction draws and pre-opening purchases. After opening, Additional Funds support the first three months while Royalty Fee, Marketing and Reservation Fee and other Item 6 charges begin according to their disclosed billing cycles.
During the 12 months ended December 31, 2025, negotiated Affiliation Fees for new Sleep Inn Franchise Agreements ranged from $5,000 to $45,000. That historical range is not a published discount schedule: Choice states that any reduction is discretionary and may be refused even when a developer has multiple units, a larger hotel or prior Choice experience.
Brand in a Box changes the timing of one pre-opening payment
Brand in a Box is mandatory and costs approximately $15,150–$30,000, excluding shipping. It includes pre-opening photography, choiceADVANTAGE hardware, the initial software license, systems onboarding, project management and the credit-card interface. The 2026 FDD permits two reimbursement paths:
One lump sum
Reimburse Choice for the covered Brand in a Box items in one payment.
12 monthly invoices
The covered amount may instead be billed on the monthly franchisee invoice over 12 months with no interest.
Source: 2026 Sleep Franchise Disclosure Document, Item 5, pp. 26–28, and Item 7, pp. 42–44. A choiceADVANTAGE onboarding reschedule can add $500–$2,100.
Which fees continue after a Sleep Inn opens?
The two core monthly percentage fees are a 5.5% Royalty Fee and a 3.5% Marketing and Reservation Fee, each calculated on the preceding month’s Gross Room Revenues. Gross Room Revenues include sleeping-room, meeting-room and banquet-room revenue and specified related charges, but exclude taxes required by law and listed non-room revenue such as food and beverage sales.
| Fee entity | Amount or basis | Timing | When it applies |
|---|---|---|---|
| Royalty Fee | 5.5% of preceding-month GRR | Monthly | Core franchise fee |
| Marketing and Reservation Fee | 3.5% of preceding-month GRR | Monthly | Core reservations and marketing charge |
| Rewards Program Fee | 4.5%–5.5% of room revenue from program members | Weekly settlement | Choice Privileges member stays |
| Choice Accelerate | 3% of GRR from qualifying direct-online stays; up to 10% for specified international paid/meta efforts | Monthly | Consumed stays delivered by the program |
| Third Party Distribution Fee | $4.00 per consumed reservation | Monthly | Specified connected online channels |
| Travel Agent commissions | Generally 10%–15% plus $0.48 processing per commissionable transaction | Weekly or monthly | Commissionable travel-agent reservations |
| Global Distribution System Fee | Currently $7.70 per reservation | Monthly | Reservations through an applicable GDS |
| ResConnect Program | 3.5% of monthly GRR booked by ResConnect | Monthly | Mandatory call-forwarding program; early exit is $500 per remaining month |
Source: 2026 Sleep Franchise Disclosure Document, Item 6, pp. 28–41. Item 6 states that, except for the Royalty Fee and liquidated damages, fees may change; it also permits increases to the Marketing and Reservation Fee for specified system-cost increases when applied broadly.
Other channel-linked percentage and transaction charges
Interpretation: the Property Technology & Service Fee has the highest disclosed monthly cap among these four mandatory fixed system charges. Its formula is $9.65 per room per month, subject to a $625 minimum and $925 maximum; ChoiceMAX is $235–$360 monthly. Source: 2026 Sleep Franchise Disclosure Document, Item 6, pp. 32–34.
Annual and periodic operating obligations
- Annual Convention Registration Fee
- $1,700 per attendee plus travel, lodging and living expenses; $500 late fee. One owner must attend.
- Regional Franchise Meeting Fee
- $299 per attendee plus travel, lodging and living expenses; $50 late-registration fee.
- Educational Resources Program
- $1,500 annually plus applicable taxes, billed in four quarterly installments.
- Additional Training Programs
- $49–$499 on enrollment, plus travel, lodging and living expenses for attending employees.
- AHLA Dues
- $5.25 per room annually; the hotel may opt out by January 15.
- Marketing Cooperative Fee
- $400–$2,400 annually when the hotel voluntarily participates; varies by region and hotel size.
Which cost obligations vary by hotel format or circumstance?
The published $9.16 million to $14.37 million range applies only to an 84-room Sleep Inn & Suites new-construction hotel. The 2026 FDD says it cannot estimate the initial investment for an existing hotel because the required upgrades depend heavily on the property’s condition. A Sleep Inn and MainStay Suites dual-brand hotel also has a different cost structure and must be evaluated with the applicable MainStay Suites disclosure rather than by combining ranges.
Choice describes Sleep Inn as a new-construction brand in its 2026 Scenic Dreams prototype announcement. Choice also publishes separate Sleep Inn–MainStay Suites dual-brand information; those descriptions do not replace the separate FDD cost contract.
Do not apply the 84-room new-construction total to a conversion, a resale, a re-licensed hotel or a dual-brand project. For an existing hotel, Choice discloses no complete Item 7 range. The High Speed Internet Access installation alone may be $0–$20,000 for a conversion, compared with $10,000–$20,000 for the new-construction wired solution.
Event-triggered fees can add substantial cost
- Construction extension: $5,000 for each approved additional three-month period to begin construction or complete renovations.
- Design waivers: $20,000 for an Interior Design Waiver and $20,000 for Architectural Design Review & Construction Services; payable on request even if the waiver is denied.
- Transfer of 50% or more: the then-current Affiliation Fee or $45,000, whichever is greater, plus a $3,000 Property Improvement Plan Fee.
- Transfer below 50%: a $7,500 Assumption Fee or $3,000 Change of Ownership charge, depending on the transaction described in Item 6.
- Non-Compliance Penalty: $35–$25,000 per instance for specified failures involving training, quality, guest satisfaction, a Property Improvement Plan, the Franchise Agreement or Rules and Regulations.
- Insurance Reimbursement Fee: $500–$100,000 if required coverage is not obtained or documented; the FDD warns a policy may fall outside that range.
- Audit Fee: anticipated at $1,000–$6,000 per inspection or audit when a payment deficiency is found, with additional interest and costs in specified cases.
- Reservation System Reinstatement: $5,000 before suspended reservation services are restored after a default.
- Late reporting and payment: the Revenue Reporting Late Fee is 1.5% of the preceding month’s Royalty Fee and Marketing and Reservation Fee; delinquent balances bear 1.5% interest.
- Liquidated Damages: before opening, the disclosed formula is sleeping rooms multiplied by 36 months multiplied by $80; after opening, the Franchise Agreement uses the greater of two disclosed formulas, subject to a 36-month cap and applicable state law.
- Post-termination trademark use: Intellectual Property Liquidated Damages are $2,500 per day for continued use after expiration or termination.
The FDD does not publish a separate Area Development Fee, multi-unit commitment schedule or multi-unit Item 7 range; any Affiliation Fee reduction for a multiple-unit developer remains discretionary. Transfer economics also depend on the Franchise Agreement. The initial term is 20 years, with no contractual renewal provision after expiration. A controlling-interest transfer requires the transferee to meet then-current qualifications, bring the hotel to then-current brand image and standards, sign the then-current Franchise Agreement and pay the re-licensing fee. Source: 2026 Sleep Franchise Disclosure Document, Items 6 and 17, pp. 34–40 and 71–74.
Does Choice disclose financing or cost incentives?
Yes, but none of the disclosed arrangements guarantees approval or reduces the official Item 7 total. Choice may, in its sole discretion and subject to credit approval, finance the Affiliation Fee without interest through a promissory note generally due in one lump sum within three months. A missed maturity triggers an 18% default annual rate, and personal signatures may be required.
Choice capital support and incentive notes
Choice may provide selected capital support for strategically important projects, but the amount and eligibility are discretionary. The 2026 Incentive Program provides $2,500 per Sleep Inn room, up to $200,000, through a 10-year forgivable promissory note funded after opening. A qualifying franchisee may request a five-year version at 50% of the 10-year amount, capped at $100,000. Remaining principal can become immediately due after specified defaults, termination, expiration, death or bankruptcy.
Qualifying buyers of an existing Sleep Inn hotel that is re-licensed into the system may receive a 50% discount on the then-current Affiliation Fee rather than the new-construction incentive note. Choice’s SOAR ownership program information describes the broader official program, while the exact Sleep Inn amounts and default conditions come from 2026 FDD Item 10, pp. 49–53.
Named third-party financing relationships
Choice also publishes an official hotel-investment and financing guide. Its general financing discussion does not alter the specific Sleep Inn loan terms in Item 10.
What liquid-capital or net-worth requirement is disclosed?
The 2026 Sleep Inn FDD does not state a specific Liquid Capital, Net Worth or Non-Borrowed Funds minimum for this offer. That absence is different from saying there is no financial qualification. Choice conducts a credit review, requires franchisees and transferees to meet then-current qualifications, and may require personal guarantees or personal signatures for financing and incentive obligations.
Ask Choice to state the current project-specific equity, liquidity, credit and guaranty requirements in writing. Do not substitute the $9.16 million Item 7 minimum for a cash-on-hand requirement, and do not treat lender approval as confirmation that every excluded development cost has been funded.
- Confirm the correct format. Obtain a project-specific budget for new construction, conversion, re-licensing, resale or dual-brand development.
- Reconcile exclusions. Price land or lease terms, real estate taxes, sitework, general conditions, contractor fees, permits and loan points separately.
- Verify payment timing. Identify which deposits, design fees and construction draws are due before lender funding or before opening.
- Model fee bases separately. Keep Gross Room Revenues, member-generated room revenue, channel-generated revenue and per-reservation charges distinct.
- Review transfer and default exposure. Price Property Improvement Plan work, re-licensing, insurance, audit, reinstatement and liquidated-damages clauses before signing.
- Request the latest amendments. The FTC explains the FDD review process and 14-day disclosure period in its Consumer’s Guide to Buying a Franchise.
What should a prospective Sleep Inn franchisee take from the cost disclosure?
The verified 2026 starting point is $9,160,125 to $14,367,915 for an 84-room Sleep Inn & Suites new-construction hotel, including Working Capital and three months of Additional Funds. The range is not a complete land-and-development budget: real estate, taxes, sitework, contractor soft costs and other local variables remain outside it. After opening, the cost contract adds a 5.5% Royalty Fee, a 3.5% Marketing and Reservation Fee, technology and training obligations, and booking-channel charges with different denominators.
The most important unresolved question is format-specific capital: the FDD gives no complete conversion range and no fixed Liquid Capital or Net Worth threshold. A buyer therefore needs a written project budget that reconciles the current FDD, the site, the development contract, lender conditions and every excluded cost without blending figures from another hotel format.