About Econo Lodge Franchise
Econo Lodge is a well established economy hotel brand within the Choice Hotels International portfolio.
The brand has been franchising since 1990, providing budget friendly accommodations for business and leisure travelers at locations across the United States and internationally.
The franchise fee is $300 per room for new franchises with a $30,000 minimum, and $500 per room for transfers and renewals with a $35,000 minimum.
Econo Lodge Franchise Cost & Fees
Minimum Investment
$161K
Average Investment
$525K
Maximum Investment
$888K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $300 per room for new franchises ($30,000 minimum), $500 per room for transfers and renewals ($35,000 minimum) | One-time payment upon signing |
| Royalty Fee | 5.0% of the preceding month’s Gross Room Revenues of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 3.5% of the preceding month’s Gross Room Revenues (System Fee) | National brand fund |
| Total Investment Range | $160,950 – $888,395 | Includes build-out, inventory, working capital |
The investment range of $161K–$888K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5.0% of the preceding month’s Gross Room Revenues) and marketing fee (3.5% of the preceding month’s Gross Room Revenues (System Fee)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Affiliation Fee | $30,000 | $35,000 |
| Property Improvements | $68,000 | $510,000 |
| Insurance | $2,000 | $70,000 |
| Advertising | $2,500 | $40,000 |
| Opening Inventories of Supplies | $10,200 | $68,000 |
| Orientation and Hospitality Training Fees | $0 | $3,345 |
| Mandatory On-Premise Signs (including freight and installation but excluding maintenance and insurance) | $15,000 | $80,000 |
| Working Capital Required Before Operations Begin | $10,000 | $30,000 |
| Hardware required to operate choiceADVANTAGE® property management system | $3,000 | $10,800 |
| choiceADVANTAGE® Software License and Systems Onboarding | $5,250 | $11,250 |
| Additional Funds for 3-Month Initial Period | $15,000 | $30,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | The then current affiliation fee or $35,000, whichever is greater (for 50% or more equity interest transfer); $0-$7,500 (for Close Family Member Transfer); $3,000 (for less than 50% equity interest transfer) |
| Technology Fee | $303-$604/month, based on room count (choiceADVANTAGE® Support Fee) |
| Audit Fee | $1,000 - $6,000 (cost of inspection or audit) |
| Rewards Program Fee (Choice Privileges) | 5% of room revenue generated by rewards programs members. |
| Airline Frequent Traveler Program Fee | 5% of room revenue generated by airline frequent travelers. |
| Affiliate and Enhanced Reservations Program Commissions | Standard commissions (currently up to 10%) for reservations delivered through our Affiliate Program or Choice Hotels Enhanced Reservations Program (CHERP). |
| Marketing Processing Fee Programs Processing Fee | $0.48 per transaction per eligible stay for Affiliate, FedRooms, GSA fees; $0.12 per transaction per eligible stay for Reward Program or CHERP fees (not charged if the Commission Processing Fee is charged by Onyx). |
| Third Party Distribution Fee | $3.00 for each consumed reservation made through directly connected online travel agents and DerbySoft. |
| Travel Agent and Other Reservation Based Commissions | Standard commission (currently 10% - 12%) through our Travel Agent Centralized Commission Program, including marketing programs developed by Choice and commissions from third party designated accounts. |
| General Sales Agents (GSA) Fee | 5% commission in addition to any applicable Travel Agent Commission. |
| Global Distribution System (“GDS”) / DHISCO Fee | Currently $7.70 for each reservation received through a GDS with which we have an agreement or with DHISCO, an online hotel reservations service. |
| Gift Card Redemption Processing Fee | 2.5% of the value of the gift card. Hotels that are set up to receive check reimbursements are charged an additional $3 monthly check fee for each month gift cards are redeemed. |
| choiceADVANTAGE® Database Clean Up Fee | $500 |
| CrowdStrike | $35 Payable monthly |
| Annual Convention Registration Fee | $1,115 plus travel, lodging and living expenses. The Late Registration Fee is $1,305. |
| Educational Resources Program | $400 plus any applicable taxes. |
| Re-Licensed Hotel Training | $995 |
| Additional Training Programs | Reasonable charges ranging from $49 - $499. |
| Room Count Change Fee | The per-room charge then being charged for new franchisees, but not less than $1,000. |
| Extension Fee | $5,000. |
| Assumption Fee | $7,500. |
| Property Improvement Plan Fee | $3,000. |
| Comfort Letter Fee | $2,500 (if a Comfort Letter is needed within 1-3 days there will be a $500 expedite fee.) |
| Association’s Regional Franchise Meeting Fee | $149 plus travel, lodging and living expenses. |
| Choice Privileges Elite Welcome Recognition Program | Approximately $0.005 per Choice Privileges point awarded to guest, or the cost of the gift provided to guest. |
| Choice Privileges Elite Benefits “Reserved Parking” Signs | Approximately $25 per “Reserved Parking” sign based on number of parking signs purchased |
| Close Family Member Transfer Fee | $0-$7,500 |
| Choice Privileges “Points Plus” Packages | Approximately $0.005 per Choice Privileges point awarded to guest. |
| Insurance Reimbursement Fee | $500-$100,000 |
| Taxes | Amount assessed by federal, state and local tax authorities |
| Resource Advisor Energy & Sustainability Software Platform | $215 (annually) up to $250 associated with implementation and service |
| Brand Activation Fee | Approximately $8,000 - $17,000 |
| Econo Lodge Franchisee Association (ELFA) Dues | $5.00/room, minimum of $250 and a maximum of $550. |
| Sales Certification Training Program | $500 per attendee |
| SmartMarketing | $0 - $45. |
| Choice Revenue Management Program | $430 - $1,700 based on offering tier/service levels and room count. |
| Interior Design Waiver Fee | Not to exceed $15,000. |
| Mega Agency and Consortia Pay for Performance Program | 2.7% of total room revenue from consumed business (for example, actual room sold). |
| Call Forwarding Reservation Service Fees | $2.95 per call transferred from your hotel to our central reservations system (“CRS”) plus any additional costs necessary to update telephones to support the Call Forwarding system. An early exit fee of $500/month remaining in the initial term (plus a pro rata share for the remaining portion of the current month) |
| ChoiceMAX Revenue Management System (or similar program) | $125 - $355 based on number of rooms. |
| Choice Privileges Meeting/Group Planner Point Program | $0.005 per Choice Privileges point awarded. |
| Marketing Cooperative Fee | $550 for 60 rooms and $850 for 61+ rooms |
| Additional Consultation and Services Fee | Dependent on the service requested |
| choiceADVANTAGE® Quick Shop | $30 monthly |
| AHLA Dues | $4.50/room |
| ChoiceMAX Training and Set Up Fee | $1,000-$2,500 |
| Choice Signature Start | Up to $3,000 Monthly. |
| Non-Compliance Penalty | $35 - $10,000 per instance of non-compliance. |
| Revenue Reporting Late Fee | 1.5% of the preceding month’s Royalty Fee and System Fee. |
| Interest | 1.5% of the delinquent amount. |
| Reservation System Reinstatement Fee | $5,000. |
| Liquidated Damages | If terminated before opening, the number of sleeping rooms multiplied by 36 months, multiplied by $25. If terminated after opening, the greater of (a) $25, multiplied by the number of sleeping rooms, multiplied by the number of months until the next date on which you may terminate the franchise agreement without penalty (not to exceed 36 months); or (b) the average monthly GRR for the last 12 months, multiplied by the Royalty Fee, multiplied by the number of months until the next date on which you may terminate the franchise agreement without penalty (not to exceed 36 months). |
| Intellectual Property Liquidated Damages | $2,500 per day that you continue to use our intellectual property following the expiration or termination of the franchise agreement. |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Approximately 65.5 hours classroom and 10-14 hours on-the-job |
| Classroom Training | Approximately 65.5 hours |
| On-the-Job Training | Approximately 10-14 hours |
| Training Location | Rockville, Maryland; Scottsdale, Arizona; or remotely via online platforms and virtual workshops. |
| Additional Training | Additional training may be required based on individual hotel needs, with tuition fees established by the franchisor. Franchisees are responsible for all travel, living, and other expenses incurred by employees attending these programs. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Non-exclusive |
| Exclusive Territory | No |
| Description | Franchises are granted for specific sites only, and franchisees will not receive an exclusive territory. Competition may arise from other franchisees, company-owned outlets, or other distribution channels and competitive brands controlled by the franchisor. However, the franchisor may, based on local market conditions or other factors, grant exclusive territories where no other hotel of the same brand will be franchised or operated for a determined period. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 20 years from the Opening Date |
| Transfer Fee | The then current affiliation fee or $35,000, whichever is greater (for 50% or more equity interest transfer); $0-$7,500 (for Close Family Member Transfer); $3,000 (for less than 50% equity interest transfer) |
| Transfer Conditions | Transferee must meet current franchisee qualifications, the hotel must comply with current brand image and standards, and the transferee must sign the then-current franchise agreement and a property improvement plan. All transferee owners must sign a personal guaranty agreement. For transfers to a Close Family Member, an application fee (not to exceed $7,500) is due. |
| Termination for Cause | The franchisor may terminate the agreement if the franchisee defaults and fails to cure within 10 days for financial defaults or 30 days for other breaches. Immediate termination is possible for non-curable defaults such as imminent public threat, abandonment, loss of possession, criminal behavior, unauthorized transfer, false records, bankruptcy, failure to maintain insurance, multiple defaults, construction failures, failure to meet opening or property improvement deadlines, impairment of brand goodwill, unauthorized disclosure of confidential information, or material breach of other agreements. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | The franchisor does not require personal participation in the direct operation of the franchised hotel. However, a certified General Manager is required at the hotel, who must complete the Hospitality Operations Success Training (HOST) program. The General Manager is not required to hold any ownership interest in the hotel. |
| Required Suppliers | Certain Qualified Vendors are designated as exclusive suppliers. Franchisees must purchase Choice Mark-bearing items (e.g., signs, bath amenities), bedding, computer hardware, and other brand standard items per brand specifications only from Qualified Vendors. |
| Supply Restrictions | All ECONO LODGE hotels must meet current minimum design standards, including Choice-approved products in public spaces and guestrooms. Franchisees must equip the hotel with furniture, fixtures, and equipment, linens, draperies, coverings, lighting, and other amenities according to franchisor specifications. The franchisor may modify specifications and limit the number of Qualified Vendors to ensure consistent quality and volume discounts. |
| Franchisor Revenue from Suppliers | The franchisor receives commissions or rebates from Qualified Vendors, typically ranging from 1% to 2% (up to 20%) of net sales volume to franchisees, plus an annual flat fee from each. In 2021, revenues attributable to franchisee purchases were $86.9 million, or about 8.14% of total revenues, including Qualified Vendor and choiceADVANTAGE® fees. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | Yes |
| Description | Choice Hotels may offer to finance the affiliation fee without interest, requiring a promissory note with payment generally due in one lump sum within three months. They also offer a Diversity and Veteran Incentive Program, providing a forgivable promissory note of $1,000 per room (max $75,000) amortized over 10 years, or a 5-year note for 50% of that amount. Additionally, Choice has non-exclusive Qualified Vendor agreements with third-party lenders like PMC Commercial Trust, Balboa Capital Corporation, and Ascentium Capital LLC, who offer conventional and lease financing for various initial and ongoing costs, with loan amounts ranging from $5,000 to $5,000,000 and terms up to 25 years. |
Econo Lodge Franchise Earnings — Item 19
Average Revenue
$67.94
Median Revenue
$66.38
Revenue Range
$34.65 – $164.35
Sample Size
653 units
Past financial performance does not guarantee future results. Individual results will vary.
Econo Lodge Litigation & Risk Flags
45 Pending Actions ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Econo Lodge System Growth
Total Units
734
Franchised
734
Company-Owned
0
Econo Lodge currently operates 734 franchised locations and 0 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 32 | 64 | 807 |
| 2020 | 33 | 63 | 777 |
| 2021 | 25 | 68 | 734 |
Transfers: 47 | Closures: 68
State Registrations
Registered in 15 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, OR, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$1069.3M
Net Income
$305.0M
Total Assets
$2043.0M
Audited by Ernst & Young LLP for year ending December 31.
Econo Lodge Franchise — FAQ
The total investment to open a Econo Lodge franchise ranges from $160,950 to $888,395, per their Franchise Disclosure Document. This includes the initial franchise fee of $300 per room for new franchises ($30,000 minimum), $500 per room for transfers and renewals ($35,000 minimum). The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Econo Lodge charges a royalty fee of 5.0% of the preceding month’s Gross Room Revenues of gross sales, plus a 3.5% of the preceding month’s Gross Room Revenues (System Fee) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Econo Lodge Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Econo Lodge to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Econo Lodge franchise owners report average revenue of $67.94 and median revenue of $66.38. This is based on a sample of 653 units. Past performance does not guarantee future results.
Econo Lodge has been franchising since 1990. The FDD shows an investment range of $160,950-$888,395, a 5.0% of the preceding month’s Gross Room Revenues royalty, and includes an Item 19 earnings disclosure. There are 45 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $300 per room for new franchises ($30,000 minimum), $500 per room for transfers and renewals ($35,000 minimum) and the total investment ranges from $160,950 to $888,395 depending on location size and market. A minimum of $10,000 in liquid capital is required. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Econo Lodge and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Econo Lodge or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com