About The Red Collection Franchise
The Red Collection is a lifestyle hotel franchise from the Red Roof family of brands, designed to bring boutique hotel style and comfort to the upper economy hospitality segment.
This 2025 franchise registration reflects the brand's continued expansion under Red Roof Franchising, LLC.
The Red Collection properties feature distinctive interior design, upgraded guest amenities, and a modern aesthetic that distinguishes them from standard economy hotels.
The Red Collection Franchise Cost & Fees
Minimum Investment
$807K
Average Investment
$1.3M
Maximum Investment
$1.8M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $30,000 | One-time payment upon signing |
| Royalty Fee | 3.0% of Gross Room Revenues of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 3.0% of Gross Room Revenues (Marketing and Reservation Fee) | National brand fund |
| Total Investment Range | $806,500 – $1,789,000 | Includes build-out, inventory, working capital |
The investment range of $807K–$1.8M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (3.0% of Gross Room Revenues) and marketing fee (3.0% of Gross Room Revenues (Marketing and Reservation Fee)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Application Fee/Initial Franchise Fee (Note 1) | $35,000 | $35,000 |
| Landscaping (Note 2) | $0 | $74,000 |
| Facility Construction and/or Renovation (Note 3) | $245,000 | $692,000 |
| Furniture, Fixtures, Soft Goods and Equipment (Note 4) | $320,000 | $569,000 |
| Guest Wi-Fi System (Note 5) | $500 | $26,000 |
| Signage (Note 6) | $12,000 | $67,000 |
| Opening Inventory and Supplies (Note 7) | $46,000 | $49,000 |
| Voice Telephone System (Note 8) | $16,000 | $24,000 |
| Reservation Platform / PMS Software License Fee and Computer Systems including Front Desk and Back-Office (Note 9) | $16,500 | $18,000 |
| Insurance (Note 10) | $0 | $73,500 |
| Training Expenses (Note 11) | $3,500 | $7,500 |
| Additional Funds (3 Months) (Note 12) | $112,000 | $154,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $15,000 |
| Renewal Fee | 50% of the then-current initial franchise fee |
| Technology Fee | Until April 30, 2022: $465 plus $25 to $50 for additional PMS Modules; Effective May 1, 2022: $200 to $275 plus $3.00 to $3.75 per room |
| Audit Fee | All costs and expenses we incur in connection with the audit if underpayment of 2% or more, or if required documents are not produced |
| RediRewards™ Member Program | 4% of Gross Room Revenues received from RediRewards Members |
| Distribution Listing Fees, Commissions and Rebates | 0-25% of any applicable net booking |
| Booking Fees | $6.60 to $7.00 per GDS booking, $3.30 to $3.60 per third party internet booking, $1.75 per direct connect booking |
| Mobile Booking Fee | $1.75 per net booking |
| Consortia Participation Fee | Up to 20% of gross room revenues generated on qualifying reservations |
| RingRedi | $59 |
| RediCall | $2.00 per call or $5.00 per confirmed reservation |
| Credit Card Payment Surcharge | 2.8% Per transaction |
| Desktop Protection and Maintenance Fee | $200 per machine Annually |
| PCI-DSS Compliance | Our costs and expenses Upon demand |
| Meetings and Conferences | Currently, $500 to $2,500, plus expenses |
| RED Advantage Non-Completion Fee | $500 per quarter for non-completion |
| On-Site Quality Training Fee | $2,000 - $4,000 |
| On-Site Audit | $1,000 Quarterly |
| Continuing Education | $800 - $1,200 |
| General Manager Training (Other than Pre-Opening or Transfer Training) | $500 - $1,000 |
| Third Party Training | Varies |
| On-Site Quality Training Rescheduling Fee | $500 per occurrence |
| New Owner Orientation | $1,000 - $1,600 per person |
| Guest Relations Intervention Fee | Currently, $75 to $100 per escalation |
| One Call Guest Relations Intervention Fee | Currently, $150 to $200 per intervention |
| Dedicated Online Contact Center Numbers | $1.50 to $2.50 per call or $5.00 to $7.00 per confirmed reservation |
| Transfer Application Fee | $2,500 |
| Reinstatement Fee | Currently, $5,000 |
| Returned Payment Fee | $50 or the amount allowed by applicable law, whichever is less |
| Late Fee; Interest on Overdue Amounts | $50 plus the lesser of 1.5% per month or the maximum rate permitted by law |
| Cyber Insurance | Premium price of the insurance (approximately $550 to $5,200 depending on the Gross Room Revenues of the Hotel) |
| Insurance Procurement | The premium price of any insurance we procure for you, plus a $2,500 administrative fee |
| Public Securities Offering | $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed offering, including legal and accounting fees. |
| Cooperative Contribution | A maximum of 1% of Gross Room Revenues |
| Supplier Testing Fee | $1,000 to $2,500 |
| Indemnification | Varies based on the circumstances |
| Liquidated Damages | Pre-opening: $100,000; Post-opening: the greater of (a) $100,000 or (b) the average of the monthly Royalty Fee, Marketing and Reservations Fee and Preferred Members Program Fee required by the Franchise Agreement for the 36 months preceding termination |
| De-Identification Fee | $5,000 per day that you continue to use our intellectual property following the expiration or termination of the Franchise Agreement |
| RediPromise® Penalty Fee | $75 |
| RediBill® | 4% to 5% of all RediBill room revenue that is billed centrally to a client. |
| American Hotel & Lodging Membership (“AH&LA”) | $3.00 per room per year |
| Rooms Addition Fee | $450 per additional guest room |
| Accelerated Pathways Program | $500 |
| Experience Page and Local Listings Fee | Initial Fee of $500 to $750; Annual fee of $500 to $750 beginning the following year |
| REDvenue Optimizer Program | $348 to $1,250 |
| Digital Performance Marketing Program | Currently, the fee is no less than 10% of Gross Room Revenues for an applicable stay, but we have the right to increase the fee to no more than 15% of applicable Gross Room Revenues. |
| RediResponse | $100 to $250 |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | RED Advantage Training (online modules and live webinars) and Field Training (2-6 days onsite). |
| Classroom Training | 21.5 |
| On-the-Job Training | 7-9 |
| Training Location | Live Webinars, OnDemand Learning Modules, New Albany, OH (for New Owner Orientation), and Your Hotel (for Field Training). |
| Additional Training | Franchisees are required to participate in a Continuing Education Program (800-1,200 per year) and may be required to attend regional conferences and brand meetings (currently $500 to $2,500, plus expenses). |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Exclusive |
| Exclusive Territory | Yes |
| Territory Size | As small as one or two blocks or as large as a small town |
| Description | We will designate a geographic area around your Hotel that we will negotiate with you and that will be specified in the Franchise Agreement (the “Exclusive Territory”). This territory applies during the term of your Franchise Agreement, assuming you meet certain requirements. We will not grant another Red Collection hotel franchise within your Exclusive Territory, except for existing Red Collection hotels. However, we and our Affiliates retain the right to operate or franchise competitive lodging facilities under different trademarks (Red Roof Inn, HomeTowne Studios) within your Exclusive Territory. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 20 years |
| Renewal Term | 10 years |
| Renewal Fee | 50% of the then-current initial franchise fee |
| Renewal Conditions | Not in default, satisfied all monetary obligations, completed current training and upgrading requirements, executed a general release, and signed the then-current franchise agreement. |
| Transfer Fee | $15,000 |
| Transfer Conditions | Compliance with all terms of the Franchise Agreement, remaining liable for prior obligations, execution of a general release by owners, transferee meeting current qualifications, transferee's manager completing training, transferee agreeing to upgrade the Hotel to current standards, and execution of current transfer and franchise agreements. |
| Termination for Cause | Franchisor can terminate for various defaults including insolvency/bankruptcy, cessation of business, threat to public health/safety, felony conviction, unauthorized transfer, misuse of proprietary marks, material false statements, repeated defaults, failure to comply with Renovation Addendum, failure to pay monies/submit reports, violation of laws, failure to upgrade, or failure to maintain quality standards. |
| Non-Compete Period | Not Applicable |
| Non-Compete Details | During the term of the franchise, you must not divert business away from Red Collection hotels and Red Roof Inn System hotels. After termination or expiration, non-compete covenants are not applicable. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | The franchised business must be directly supervised “on-premises” by a manager who has successfully completed our RED Advantage Training Program. The manager need not have an ownership interest but must devote full time and best efforts to managing the Hotel and may not work for any competitor. Owners and their spouses are required to sign a Guarantee, Indemnification and Acknowledgement. |
| Required Suppliers | Franchisees are required to purchase certain brand specific and The Red Collection logoed items, marketing materials, exterior and interior signage, the computer system, Reservation Platform / PMS, technology equipment, furnishings, fixtures and equipment for the Hotel from Designated Suppliers. The Reservation System is provided by RRI Reservations, an affiliate. |
| Supply Restrictions | Franchisor's standards and specifications apply to 80-90% of purchases and leases. Franchisees must use the Reservation Platform / PMS and computer systems that support it. Franchisees must provide high-speed internet access and flat-screen televisions meeting franchisor standards. If a franchisee wishes to use a non-designated supplier, they must submit a written request and evidence of conformity to specifications, and may be required to pay for evaluation and testing. Franchisor can revoke approval of suppliers. |
| Franchisor Revenue from Suppliers | In 2021, we did not receive revenue from our suppliers on account of franchisee purchases. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | We do not offer direct or indirect financing to franchisees. We will not guarantee your note, lease, or other obligation. |
The Red Collection Franchise Earnings — Item 19
The Red Collection 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.
The Red Collection 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.
The Red Collection Litigation & Risk Flags
Clean Litigation RecordThe Red Collection 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.
The Red Collection System Growth
Total Units
3
Franchised
3
Company-Owned
0
The Red Collection currently operates 3 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 | 1 | 0 | 2 |
| 2020 | 1 | 1 | 3 |
| 2021 | 2 | 1 | 3 |
Transfers: 1 | Closures: 0
State Registrations
Registered in 13 states: California, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, Wisconsin
Franchisor Financials (Item 21)
Revenue
$84.4M
Net Income
$20.6M
Total Assets
$58.2M
Audited by Plante & Moran, PLLC for year ending December 31.
The Red Collection Franchise — FAQ
The total investment to open a The Red Collection franchise ranges from $806,500 to $1,789,000, per their Franchise Disclosure Document. This includes the initial franchise fee of $30,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
The Red Collection charges a royalty fee of 3.0% of Gross Room Revenues of gross sales, plus a 3.0% of Gross Room Revenues (Marketing and Reservation Fee) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the The Red Collection 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 The Red Collection to ensure you have the most up-to-date version.
The Red Collection 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.
The Red Collection has been franchising since 2017. The FDD shows an investment range of $806,500-$1,789,000, a 3.0% of Gross Room Revenues royalty, and no 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 $30,000 and the total investment ranges from $806,500 to $1,789,000 depending on location size and market. A minimum of $112,000 in liquid capital is required. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
Similar Hospitality & Travel Franchises
Interested in The Red Collection?
Get free info on this franchise. We will send you a detailed FDD report by email.
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 The Red Collection and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with The Red Collection or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com