Red Roof Inn Franchise Cost (2025)
Complete cost breakdown for Red Roof Inn franchise: $6008K–$8900K investment, 5% royalty, franchise fee, and ongoing costs. From the official 2025 FDD.
Source: 2025 FDD filed in MN
Total Investment
$6.0M–$8.9M
Franchise Fee
$12K–$27K
Non-refundable
Royalty
5%
Gross Room Revenues. May receive 0.5% rebate for meeting brand standards.
Ad Fund
4%
Gross Room Revenues (Marketing and Reservation Fee; may increase to max 5%)
Ongoing Fees
Monthly and annual costs after opening.
| Fee | Amount | Notes |
|---|---|---|
| Royalty | 5% of gross sales | |
| Ad Fund | 4% of gross sales |
Revenue Context
Average Revenue
$1.1M
From Item 19 (2025 FDD)
Investment-to-Revenue Ratio
5.3x
Lower is better (min inv ÷ avg rev)
Annual Fee Burden
9.0%
Royalty + ad fund as % of gross sales
At average revenue of $1.1M, you'd pay approximately $56K/year in royalties alone, plus $45K/year in ad fund contributions.
Other Upfront Fees
| Fee | Amount |
|---|---|
| Application Fee (partially refundable) | $3K |
| Reservation Platform / PMS License Fee | $15K |
| Opening Package (photo shoot + training materials) | $3K |
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