Red Roof Inn
Health Score
65 Our derived Health Score (1–100) = growth (30%) + fees (20%) + scale (20%) + transparency (15%) + data quality (15%) High Fee Burdenhigh_total_investmentrevrpar_only_disclosure_no_direct_revenueaffiliate_owned_units_declining
Investment Range Total estimated initial investment from the FDD, including franchise fee, build-out, equipment, and working capital.
$6.0M–$8.9M
Franchise Fee One-time upfront fee paid to the franchisor for the right to operate under their brand.
$12,000–$27,000
Royalty Ongoing fee paid to the franchisor, typically a percentage of gross revenue, paid weekly or monthly.
5%
Gross Room Revenues. May receive 0.5% rebate for meeting brand standards.
Total Units Total number of franchised and company-owned locations currently operating.
619
+2.1% growth
Financial Performance (Item 19)
Avg Revenue Average gross revenue reported by franchisees in the FDD's Item 19 financial performance representation.
$1.1M
Sample Size Number of franchise locations included in the financial performance data. Larger samples are more reliable.
584
Above Average Percentage of reporting units that earned above the system average. Below 50% means a few top performers skew the average up.
44.5%
Reporting period: 2024-01-01 to 2024-12-31
Unit Growth
| Year | Total Units | Opened | Closed |
|---|---|---|---|
| 2022 | 597 | — | — |
| 2023 | 606 | — | — |
| 2024 | 619 | — | — |
Other Ongoing Fees
| Fee | Amount | Frequency |
|---|---|---|
| RediRewards Preferred Member Program Fee | $4% of Gross Room Revenues from RediRewards members (may increase to max 5%) | monthly |
| Reservation Platform / PMS Monthly Fee | $$490/month + $3.85/room/month | monthly |
| GDS Booking Fee | $$6.60–$7.00 per GDS booking | per transaction |
| Third-Party Internet Booking Fee | $$3.30–$3.60 per booking | per transaction |
| Direct Connect Booking Fee | $$1.99–$2.25 per booking | per transaction |
| Digital Performance Marketing | $Minimum 3% of applicable Gross Room Revenues (up to 15%) | monthly |
| Transfer Application Fee | $$2,500 | upon transfer |
| Re-Visit Fee | $$2,250–$5,000 | as incurred |
| RediResponse Fee | $$125–$250 per engagement | as incurred |
| Training — New Owner Orientation | $$1,000–$1,600 per person | one-time |
| Training — On-Site Training Visit | $$4,500–$5,000 | one-time |
Quick Facts
Fee Burden Combined percentage of gross revenue paid in ongoing fees (royalty + advertising/marketing fund).
13%
royalty + ad fund
Franchised Number of locations owned by independent franchisees, not the franchisor.
584
Company-Owned Locations owned directly by the franchisor. High ratios can signal corporate confidence — or difficulty selling franchises.
35
Explore More
Free Consultation
Seriously considering Red Roof Inn?
A franchise consultant can verify the Item 19 numbers with real franchisee contacts, flag territory conflicts, and walk you through the FDD before you sign. Their fee is paid by the franchisor — your consultation is free.
Source: FDD filed in MN, 2025. Extracted 2026-04-05.
Frequently Asked Questions
- Is Red Roof Inn a franchise?
- Yes, Red Roof Inn is a franchise with 619 locations. Prospective owners purchase the right to operate under the Red Roof Inn brand and system by signing a franchise agreement and paying a franchise fee. The full terms are disclosed in the Franchise Disclosure Document (FDD).
- How much does it cost to open a Red Roof Inn franchise?
- The total initial investment for a Red Roof Inn franchise ranges from $6.0M to $8.9M, according to the 2025 FDD. This includes the franchise fee, build-out, equipment, and initial working capital.
- How much do Red Roof Inn franchise owners make?
- According to the 2025 FDD Item 19, the average annual gross revenue for a Red Roof Inn franchise is $1.1M (based on 584 units). Note that gross revenue is not profit — operating costs, royalties, rent, and labor must be subtracted.
- How many Red Roof Inn franchise locations are there?
- As of the 2025 FDD, Red Roof Inn has 619 total units (+2.1% growth rate).