About Red Roof Franchise
Red Roof is a well established economy hotel franchise that has been part of the hospitality franchise landscape since 1996, with the company founded in 2007 in its current structure under Red Roof Inns, Inc.
The brand serves budget conscious travelers, road trippers, and business guests with clean, comfortable rooms at affordable rates.
The franchise fee is $150,000.
Red Roof Franchise Cost & Fees
Minimum Investment
$7.3M
Average Investment
$8.1M
Maximum Investment
$8.9M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $150,000 | One-time payment upon signing |
| Royalty Fee | 5% of Gross Room Payable of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 4% of Gross Sales | National brand fund |
| Total Investment Range | $7,253,500 – $8,899,600 | Includes build-out, inventory, working capital |
The investment range of $7.3M–$8.9M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5% of Gross Room Payable) and marketing fee (4% of Gross Sales) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| PAYMENT TO BE MADE Application Fee/Initial | $30,000 | $30,000 |
| due upon execution of the Franchise Agreement Opening Package | $2,500 | $2,500 |
| Lump Sum Before submission of a Consultants Franchise Application Phase I Enviro | $0 | $6,000 |
| commitment for land acquisition Design, Testing & Fees | $150,000 | $220,000 |
| Engineers, Local Municipalities & Vendors Site and Civil Work | $205,000 | $306,000 |
| Vendors Landscaping and | $37,000 | $75,000 |
| Vendors Facility Construction | $5,986,000 | $6,906,500 |
| Subcontractors, Construction Managers, & Vendors Construction | $0 | $130,000 |
| Vendors Owner Project | $45,000 | $91,000 |
| Vendors Furniture, Fixtures, | $574,000 | $664,500 |
| Lump Sum Prior to Opening Installers & Vendors Opening Inventory and | $11,000 | $25,000 |
| Note | $9,000 | $27,000 |
| PAYMENT TO BE MADE Guest Wi-Fi System | $15,000 | $30,000 |
| Voice Telephone | $16,000 | $24,000 |
| Reservation Platform / | $16,500 | $22,000 |
| Lump Sum Prior to Opening Insurers & RRF Training Expenses | $5,500 | $9,100 |
| excludes land | $7,253,500 | $8,899,600 |
| PAYMENT TO BE MADE Application Fee/Initial | $30,000 | $30,000 |
| due upon execution of the Franchise Agreement Opening Package | $2,500 | $2,500 |
| Lump Sum Before submission of Consultants a Franchise Application Phase I Enviro | $0 | $6,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $15,000 |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | Franchisor does not offer financing. |
Red Roof Franchise Earnings — Item 19
Red Roof does not make an Item 19 financial performance representation in their FDD. This means they do not disclose revenue, profit, or earnings data for franchised locations. Before investing, ask the franchisor directly for franchisee contact information so you can speak with existing owners about their actual financial performance.
Red Roof does not include an Item 19 financial performance representation in their FDD. Contact information for current and former franchisees is listed in Item 20 of the FDD.
Red Roof Litigation & Risk Flags
Clean Litigation RecordRed Roof has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Red Roof System Growth
Total Units
1167
Franchised
606
Company-Owned
561
Red Roof currently operates 606 franchised locations and 561 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Red Roof Franchise — FAQ
The total investment to open a Red Roof franchise ranges from $7,253,500 to $8,899,600, per their Franchise Disclosure Document. This includes the initial franchise fee of $150,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Red Roof charges a royalty fee of 5% of Gross Room Payable of gross sales, plus a 4% of Gross Sales contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Red Roof 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 Red Roof to ensure you have the most up-to-date version.
Red Roof does not provide an Item 19 financial performance representation in their FDD, which means they do not disclose franchisee revenue or earnings data. Prospective investors should contact existing franchisees directly (listed in Item 20 of the FDD) to gather real-world financial performance information.
Red Roof has been franchising since 1996. The FDD shows an investment range of $7,253,500-$8,899,600, a 5% of Gross Room Payable royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $150,000 and the total investment ranges from $7,253,500 to $8,899,600 depending on location size and market. 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 Red Roof and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Red Roof or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com