A manager-run, 57-room Rodeway Inn conversion may produce estimated pre-tax owner earnings in this range under the three scenarios below. The base scenario is about $110,000. An owner who personally replaces a paid lodging manager may receive an estimated owner-operator benefit of roughly $136,000–$229,000, but the added amount compensates the owner for active work and is not passive business profit.
Independent estimate: These earnings figures are analytical scenarios, not an Item 19 financial performance representation by Choice Hotels International, Inc. The model combines identified facts from the 2026 Rodeway Inn Franchise Disclosure Document with a same-parent operating proxy, a U.S. Bureau of Labor Statistics wage benchmark, and clearly labeled scenario assumptions. Actual results can differ materially because of location, room count, occupancy, Average Daily Rate, labor, property costs, booking-channel mix, financing, owner involvement, physical condition, and execution.
Legal franchisor: Choice Hotels International, Inc. Document: Rodeway Inn Franchise Disclosure Document issued April 1, 2026 and amended May 20, 2026. Item 19 status: official U.S. franchised-hotel Occupancy, Average Daily Rate, Revenue Per Available Room, enterprise contribution, and loyalty-program contribution for the year ended December 31, 2025; no owner-profit or net-income disclosure. Population: 388 Performance Sample hotels out of 432 open and operating U.S. Rodeway Inn hotels. Public FDD link: no matching official franchise-controlled copy was verified, so FDD references are cited in plain text. Date checked: July 14, 2026.
Official revenue-productivity data, estimated earnings. Item 19 supplies RevPAR, ADR, occupancy, sample coverage, and exclusions. It explicitly says the tables do not deduct operating costs or other expenses needed to determine net income or profit.
Rodeway Inn does not disclose a franchised-hotel expense statement, EBITDA, Operating Profit, Net Income, owner compensation, or cash flow. The margin bridge therefore relies on Choice Hotels’ broader company-operated hotel results, which are not Rodeway-specific and are not proven comparable to a franchised economy hotel.
Pre-tax residual before financing, depreciation, capital expenditures, and personal taxes.
Gross room revenue per available room for the 388-hotel Performance Sample.
The middle hotel’s RevPAR; it is not the same statistic as the average.
388 of 432 open and operating U.S. franchised Rodeway Inn hotels.
5.0% Royalty Fee plus 3.5% Marketing and Reservation Fee on Gross Room Revenues.
BLS May 2024 median annual wage; used only in the owner-operator comparison.
What does Rodeway Inn Item 19 actually measure?
Item 19 measures room-revenue productivity and distribution contribution, not owner earnings. For the year ended December 31, 2025, it reports Occupancy, Average Daily Rate, Revenue Per Available Room, Total Choice Enterprise Contribution, Choice Privileges Contribution, and Choice Privileges Average Daily Rate for a defined population of U.S. franchised Rodeway Inn hotels.
The strongest revenue anchor is average RevPAR of $35.78 across 388 Performance Sample hotels. The official median was $32.36. RevPAR means gross room revenue divided by available guest rooms; it is revenue, not Gross Profit, EBITDA, Net Income, cash flow, owner salary, or distributions.
| Official 2025 Item 19 measure | Average | Median | Hotels at or above average |
|---|---|---|---|
| Occupancy Rate | 49.4% | 48.8% | 186 / 47.9% |
| Average Daily Rate | $72.49 | $69.45 | 173 / 44.6% |
| Revenue Per Available Room | $35.78 | $32.36 | 165 / 42.5% |
| Total Choice Enterprise Contribution | 51.1% | 51.2% | 195 / 50.3% |
The Performance Sample included hotels open and operating on December 31, 2025 that had operated on or before January 1, 2025. It excluded hotels repositioned from another Choice brand during 2025, hotels missing at least 30 days of performance data, and hotels interrupted for more than 30 consecutive days. Three Rodeway Inn hotels closed after operating for less than one year. These rules make the sample more comparable, but they also mean the figures do not describe every hotel that entered, closed, transferred, renovated, or had incomplete data during the year. Source: 2026 Rodeway Inn FDD, Item 19, pp. 69–72.
A 57-room hotel at $35.78 RevPAR generates about $744,403 in annual room revenue before expenses. Calling that amount “owner income” would ignore payroll, occupancy costs, utilities, insurance, repairs, supplies, distribution costs, franchise fees, management, financing, and capital needs.
How is the annual owner-earnings range calculated?
The range converts Item 19 RevPAR into room revenue, applies a transparent operating-margin sensitivity, and then deducts Rodeway Inn’s disclosed core recurring fees. It is an independent estimate for a modeled 57-room conversion hotel—the room count used in Item 7—not a claim that the Item 19 sample averaged 57 rooms.
Manager-run estimated pre-tax owner earnings = annual room revenue × adjusted operating margin − modeled fixed recurring franchise charges.
Because Item 19 gives one average and no quartiles, the Conservative, Base, and Upside revenue anchors use an explicit analytical spread of 80%, 100%, and 120% of the $35.78 average RevPAR. This spread is not reported by Choice Hotels and is not a probability forecast.
For the expense bridge, Choice Hotels’ 2025 audited statements report $121.373 million of owned-hotel revenue and $91.684 million of owned-hotel expense, a direct hotel spread of about 24.46%. The company owned 17 hotels across unspecified brands at year-end; the official Choice Hotels SEC filings provide public parent-company reporting context. The model treats that spread as a pre-franchise-fee operating proxy, applies a ±3 percentage-point sensitivity, deducts Rodeway Inn’s 8.5% Royalty Fee plus Marketing and Reservation Fee, and subtracts approximately $8,940 of modeled annual fixed charges for a 57-room property.
| Scenario | RevPAR / annual room revenue | Adjusted margin before fixed fees | Manager-run earnings |
|---|---|---|---|
| Conservative | $28.62 / $595,522 | 12.96% | $68,245 |
| Base | $35.78 / $744,403 | 15.96% | $109,873 |
| Upside | $42.94 / $893,283 | 18.96% | $160,435 |
Estimated annual pre-tax residual for the modeled 57-room hotel, before financing and property-level capital expenditures.
Interpretation: Revenue and margin move together in this sensitivity model; the chart does not identify a most-likely outcome.
Source and method: 2026 Rodeway Inn FDD, Item 19, pp. 69–72; Item 6, pp. 24–36; Item 7, pp. 36–39; Exhibit C, consolidated statements of income and owned-hotel disclosures. Values are independently calculated and rounded for display.
The owned-hotel spread is a same-parent proxy, not a Rodeway Inn franchised-hotel margin. Choice Hotels’ owned portfolio can differ in brand, scale, amenities, ancillary revenue, labor model, property condition, accounting, and internal fee treatment. If equivalent brand charges are already embedded in the owned-hotel expense line, the explicit 8.5% deduction may be conservative; if important Rodeway expenses are absent, the estimate may be too high.
How does active owner operation change the result?
For the same modeled 57-room hotel, an owner who replaces the certified General Manager could increase total economic benefit by the market value of that labor, but not necessarily increase pure business profit. This is an estimated owner-role comparison using 2025 hotel-performance inputs and a 2024 wage benchmark. Item 15 does not require the owner to operate the hotel, yet it requires a certified General Manager. The comparison therefore adds the U.S. Bureau of Labor Statistics’ May 2024 median lodging-manager wage of $68,130 to the manager-run residual.
This produces an estimated owner-operator benefit of approximately $136,000, $178,000, and $229,000 across the three scenarios. The BLS figure is a national occupation benchmark, not a Rodeway Inn payroll disclosure. It excludes the owner’s personal taxes and may not equal the local cash cost of salary, payroll taxes, benefits, relief coverage, or around-the-clock management demands.
The square marker is manager-run residual profit; the circle adds $68,130 of lodging-manager labor value.
Interpretation: The $68,130 gap represents labor performed by the owner. It should not be characterized as passive income or a franchisor-reported profit uplift.
Source and method: Rodeway Inn Item 15, 2026 FDD, p. 64; U.S. Bureau of Labor Statistics lodging-manager wage data. Scenario values are independently calculated.
What is included in “estimated pre-tax owner earnings”?
In the 2025-performance, 57-room manager-run scenario, the figure is intended to represent cash available after normal modeled hotel operations and specified recurring franchise fees, but before financing, depreciation, capital expenditures, and personal taxes. This is an estimated business-level analytical residual, not an official FDD profit measure or after-tax take-home pay.
Explicitly modeled
5.0% Royalty Fee; 3.5% Marketing and Reservation Fee; Property Technology & Service Fee at $8.35 per room per month; CrowdStrike; Rodeway Owners Association dues; annual convention registration; Educational Resources Program; and regional meeting fee.
Assumed inside the operating proxy
Normal payroll including a manager, housekeeping and front-desk labor, utilities, insurance, repairs, supplies, occupancy costs, and ordinary booking-channel or loyalty costs. This assumption prevents automatic double subtraction but is not verified for a Rodeway Inn property.
Excluded from the estimate
Financing interest, loan principal, depreciation, income taxes, property acquisition or lease financing, owner-specific corporate overhead, extraordinary repairs, renovation, furniture-fixtures-and-equipment reserves, and other capital expenditures.
Variable fees requiring local data
Choice Privileges fees, travel-agent commissions, third-party distribution fees, Global Distribution System charges, Choice Accelerate, platform marketing, optional revenue-management services, and program-specific booking charges depend on channel mix and participation.
The modeled fixed franchise charges total about $8,940 a year for 57 rooms before travel, lodging, taxes, fee changes, optional services, noncompliance charges, or property-specific programs. Item 6 also states that most fees can change. The 8.5% core percentage burden is therefore only the most stable, reproducible starting point—not the full cost of every reservation or brand program. Source: 2026 Rodeway Inn FDD, Item 6, pp. 24–36.
What could move actual earnings outside the modeled range?
For the 2025-performance, 57-room scenario, the largest uncertainty is the absence of same-brand operating expenses or profit in Item 19. The earnings answer is estimated, not official. RevPAR can be converted into room revenue, but a buyer still needs property-level evidence for payroll, utilities, insurance, repairs, property tax, lease or mortgage cost, distribution mix, and recurring capital needs.
- Room count and physical condition: the model uses 57 rooms because Item 7 uses that count for a conversion estimate. A larger hotel does not scale profit mechanically because staffing, maintenance, utilities, insurance, and renovation needs change.
- Revenue mix: Item 19 RevPAR covers gross room revenue per available room. Food and beverage, vending, parking, or other ancillary revenue and expense can vary and are not modeled as separate Rodeway Inn economics.
- Labor and owner coverage: a hands-on owner may reduce manager payroll but can still require relief managers, night coverage, payroll taxes, benefits, or specialized staff. Local wage markets can differ substantially from the national BLS median.
- Occupancy and rate interaction: the 2025 sample averaged 49.4% occupancy and $72.49 ADR. A property can reach the same RevPAR through different combinations, with different housekeeping, commission, and maintenance implications.
- System movement: Item 20 shows U.S. franchised outlets declining from 447 at the start of 2025 to 432 at year-end, with 35 openings, 6 terminations, 2 non-renewals, and 42 outlets ceasing operations for other reasons. Those counts do not prove why any property succeeded or failed, but they warrant direct investigation.
- Debt and capital expenditure: a hotel may show positive unit-level operating earnings while delivering little cash to the owner after interest, principal, required renovations, deferred maintenance, and furniture-fixtures-and-equipment replacement.
Only 42.5% of the Performance Sample met or exceeded the reported average RevPAR. That does not mean 57.5% lost money; it means average RevPAR was above many individual observations. The FDD does not publish the profit outcome associated with any RevPAR level.
What should a buyer verify before relying on this range?
Because the earnings answer is an independent 57-room scenario rather than an official 2025 profit measure, a buyer should replace every broad assumption with property-level records and written substantiation. The 2026 FDD says the franchisor will provide written substantiation for Item 19 within a reasonable period after a written request, and Item 20 identifies current and former franchisees who can discuss actual operating costs.
- Request the complete Item 19 substantiation and confirm the target hotel’s room count, RevPAR, occupancy, ADR, booking-channel mix, and interruption history.
- Obtain at least three years of monthly property-level profit-and-loss statements, tax returns, occupancy reports, payroll records, utility bills, insurance invoices, and repair-and-maintenance detail for any existing hotel.
- Ask current Rodeway Inn franchisees to separate Royalty Fee, Marketing and Reservation Fee, Choice Privileges, online travel agency commissions, distribution charges, technology, optional revenue management, and local marketing.
- Determine whether the owner will act as the certified General Manager, how many weekly hours that requires, and what backup management coverage will cost.
- Model financing interest and principal separately, then add a property-specific reserve for renovations, furniture, fixtures, equipment, roofs, parking lots, HVAC, and other deferred maintenance.
- Reconcile the seller’s or developer’s earnings claim to the exact definition: revenue, Gross Profit, Operating Profit, EBITDA, Net Income, cash flow, owner salary, draw, distributions, and retained earnings are not interchangeable.
For regulatory context, the Federal Trade Commission Franchise Rule governs how franchisors make financial performance representations. The official U.S. Rodeway Inn brand site and Choice Hotels franchise development website provide current brand and development context, but neither should substitute for the operative FDD, franchise agreement, substantiation, and property records.
What is the strongest defensible annual earnings range?
The strongest defensible range from the available evidence is approximately $68,000–$160,000 in manager-run, pre-tax owner earnings for the modeled 57-room hotel, with a base scenario near $110,000. This is scenario-based, not an official Rodeway Inn profit disclosure. If the owner personally performs the certified General Manager role, estimated owner-operator benefit rises to about $136,000–$229,000, but roughly $68,130 of that amount represents labor value rather than passive residual profit.
The most important earnings driver is RevPAR converted across available rooms; the largest unresolved uncertainty is the true Rodeway Inn expense structure after local payroll, property costs, booking-channel charges, maintenance, and capital needs. Before making a decision, verify Item 19 substantiation, obtain property-level financial records, and test this model against several current and former franchisee interviews. Debt service and personal income taxes remain separate and can materially reduce cash available to the owner.