How Much Does a WoodSpring Suites Franchise Owner Make?

The official result most relevant to a new U.S. buyer is a 2025 median Gross Operating Profit of $1,285,194 and a median GOP percentage of 54.8% for 102 stabilized purpose-built franchised properties. This is an official FDD measure, but it is not the owner's salary, distributions, net income, or cash after debt service.

Item 19 defines Gross Operating Profit as Total Revenue minus Total Departmental Costs and Total Undistributed Operating Costs. Those operating costs include rooms-department labor and supplies, Administrative & General expenses, Information & Telecommunications, Sales & Marketing, Property Operation & Maintenance, and Utilities. Administrative & General includes general-manager payroll and certain regional or corporate wages allocated to a hotel. Sales & Marketing includes franchise royalty and advertising assessment fees.

Source: WoodSpring Suites 2026 FDD, Item 19, Tables 1-3, pp. 76-80. The FDD presents each statistic independently; a median revenue multiplied by a median margin will not necessarily equal the separately reported median GOP.

For a stabilized purpose-built hotel anchored to the 102-property 2025 Item 19 cohort, the manager-run estimate subtracts four below-GOP assumptions from a scenario GOP: insurance, property tax, a capital-replacement reserve, and a third-party management fee. The result is estimated pre-tax owner earnings before financing principal payments and personal income taxes. Interest and depreciation are not deducted because financing and tax structures differ by owner; both must be modeled separately in underwriting.

Which assumptions are official and which are analytical?

For the 102 stabilized purpose-built franchised hotels in calendar 2025, the official anchors are the median revenue and median GOP percentage. The 80%, 100%, and 120% revenue spread and the median GOP margin minus three, unchanged, and plus three percentage points are editorial sensitivities because Item 19 does not publish revenue or GOP quartiles. They are not probabilities and the midpoint is not a forecast.

• Insurance benchmark: 1.9% of revenue. CBRE reported that extended-stay hotels had the highest 2022 insurance burden in its sample at 1.9% of total revenue. The source is older than the FDD period, and CBRE also documented rapid insurance-cost growth, so actual quotes may be materially higher. Review CBRE's hotel insurance analysis.
• Property-tax sensitivity: 2.0%-4.0% of revenue. CBRE's analysis of more than 6,000 hotels found material variation by region and hotel type, with some burdens below 2% and others above 4%. This is a location sensitivity, not a WoodSpring-specific fact. Review CBRE's 2025 property-tax study.
• Third-party management: 3.0%-3.5% of gross revenue. A 2025 SEC filing for a limited-service hotel owner discloses base management fees in that range. Incentive, accounting, revenue-management, or centralized-service fees could add to the cost. The WoodSpring FDD does not state consistently whether an external base management fee was already classified within Administrative & General for every reporting property; if it was, subtracting it again would understate earnings. Review the limited-service management-fee disclosure.
• Capital reserve: 4.0% of revenue. The model uses the low end of a current hotel-company disclosure that typically reserves 4%-5% of gross hotel revenue for capital expenditures. It is not a WoodSpring requirement and may not match a property's actual capital plan. Review the public hotel capital-reserve disclosure.

Rounding: calculations use unrounded inputs and are published to the nearest $1,000. The base calculation is $2,335,532 × (54.8% - 1.9% - 3.0% - 4.0% - 3.25%) = $996,104, rounded to $996,000.

For the same stabilized purpose-built 2025 scenario population, active owner direction may increase the owner's estimated economic benefit by avoiding some third-party management-company fees where Choice and the lender permit that structure, but it does not eliminate the certified General Manager requirement. Item 15 says the owner is not required to participate personally, a certified General Manager must operate the hotel, and Choice may require a recognized extended-stay management company. Therefore, the owner-directed figures below retain the general-manager and hotel payroll already contained in GOP.

For the 2025 stabilized franchised-property population, the official Item 19 definition places the 6.0% Royalty Fee and 2.5% Marketing and Reservation Fee within Sales & Marketing. Subtracting the 8.5% combination again from GOP would double-count those costs. The percentage applies to Gross Room Revenues, not necessarily Total Revenue.

• Royalty Fee - 6.0% of Gross Room Revenues. Official recurring FDD fee, payable monthly.
• Marketing and Reservation Fee - 2.5% of Gross Room Revenues. Official recurring FDD fee, payable monthly; the franchisor may increase it under the conditions described in Item 6.
• Property Technology & Service Fee - $6.10 per room monthly. Subject to a $400 monthly minimum and $560 monthly maximum in the 2026 FDD. Item 19's Information & Telecommunications category includes system-related technology costs, so the scenario does not subtract this fee separately.
• Channel and reservation charges. Online travel agency, Global Distribution System, travel-agent, affinity, and other program fees vary with booking source. Item 19 Rooms Departmental Expenses and Sales & Marketing definitions capture relevant operating and franchise reservation costs; property-level statements are needed to see the actual channel mix.

Source: WoodSpring Suites 2026 FDD, Item 6, pp. 27-38; Item 19 definitions, pp. 79-80.

For a purpose-built hotel evaluated from the 2025 Item 19 cohort, the largest unresolved uncertainty is the estimated treatment and magnitude of below-GOP expenses for the specific property. Property tax, insurance, management agreements, capital expenditures, ownership overhead, and financing can move annual cash available to the owner by hundreds of thousands of dollars even when hotel-level GOP is unchanged.

Item 20 provides useful system context rather than an earnings guarantee. Franchised outlets increased from 256 at the start of 2025 to 284 at year-end, with 28 openings and no reported terminations, non-renewals, reacquisitions, or other closures during that year. Twenty outlets transferred to new owners. Choice's 2025 Form 10-K independently reports 284 U.S. WoodSpring hotels and describes the brand as a new-construction, economy extended-stay model. The outlet trend does not prove that an individual property will achieve the Item 19 averages.

How should debt service and taxes be handled?

Debt service is an owner-specific, estimated cash-flow calculation and must be modeled separately for the target property using the actual loan amount, interest rate, amortization term, fees, and reserve requirements. Principal repayment is a cash outflow but not an operating expense; interest may affect accounting and taxable income. The scenario does not calculate after-tax take-home pay because entity structure, state and local taxes, depreciation, interest deductions, and owner circumstances differ.

The Item 7 initial investment range is also not an annual expense and must never be subtracted from one year of revenue. It is construction and opening context for a roughly 122-room property, excluding real estate, not a profit line.

A buyer evaluating a purpose-built U.S. property should treat the 2025-anchored range as uncertain and reconstruct the economics from property-level records rather than accept the scenario as a forecast. The FTC notes that averages can conceal dispersion and recommends requesting written substantiation and speaking with current and former franchisees.

• Request the Item 19 written substantiation. Confirm how each reporting hotel classified property tax, insurance, management fees, ownership overhead, and capital spending.
• Match the target property to the correct cohort. Verify prototype, room count, opening date, market type, age, and whether the property is stabilized or still ramping up.
• Obtain at least three years of property-level statements. Reconcile occupancy, Average Daily Rate, RevPAR, room revenue, other revenue, payroll, Sales & Marketing, GOP, and cash capital expenditures.
• Price insurance and property tax locally. Use written insurance quotes, assessed value, tax rate, appeals history, catastrophe exposure, and required coverage rather than a national percentage.
• Read the management agreement. Identify base and incentive fees, accounting and revenue-management charges, reimbursable expenses, termination rights, and any overlap with FDD operating categories.
• Interview current and former franchisees. Ask separately about hotel GOP, cash distributions, debt service, capital calls, management structure, owner time, and differences between mature and newly opened properties.