Hotel franchise costs

Most branded hotels in the US are owned by an investor or a hotel company that pays a franchisor for the name, the reservation system and the loyalty program. Hotel franchising is a real estate business: the owner buys or builds the property, usually with a bank loan, and often hires a management company to run it. The brand brings bookings; the owner carries the building.

There are two ways in. Building a new hotel costs millions, set by the number of rooms and the brand’s tier. Converting an existing hotel to a brand costs a fraction of that, mostly renovation to the brand’s standards. Brands that only quote a conversion are left out of the cheapest table below; their pages show those estimates.

What a hotel franchise costs

Across the 116 brands on the hotel list, the typical cost to open runs from $9.44M at the low end of each brand’s estimate to $21.3M at the high end. The low end is a small location in a cheaper market with little build-out; the high end a large site in an expensive one. Of these brands, 18 start at $250K or less and 1 at $100K or less.

Where the money goes

Each franchisor itemizes its cost to open. Grouping the lines for the 89 hotel brands with a full breakdown shows what a typical budget pays for, as an average share of the high estimate, with the typical amount.

Construction is most of the estimate: the building, site work and fit-out, then furniture, fixtures and equipment for every room. Most estimates exclude the land. The franchise fee is a tiny share, but hotel royalties, marketing and reservation fees, charged on room revenue and sometimes per room or per booking, add up to a meaningful cut of revenue every year.

Cheapest and most expensive hotel franchises

The cheapest hotel brands with at least 20 US locations, by the low end of the cost to open. Use the full range on each brand’s page for budgeting, not the low end alone.

Fees and royalties

The typical hotel brand charges a franchise fee of $54K, a royalty of 5% of sales and 3% to a marketing fund. Another 44 brands charge a flat or tiered royalty instead of a single percentage. Royalties and marketing come off sales before rent, staff or loan payments, so on a typical year they cost a set share of every sale. The fees and royalties guide compares industries.

Hotel franchise sales

Hotel brands rarely publish sales per property the way restaurants do. Revenue depends on rooms, occupancy and the average rate, so ask a brand for its revenue per available room in your market against the competing hotels, and for the share of bookings that come through its own reservation system and loyalty program.

Which hotel franchises are growing

Of the 66 hotel brands with three years of figures, 41 added US locations from 2023 to 2025 and 14 shrank. The typical brand with 20 or more locations changed by +3.8%, against +3.8% across all franchises.

The brands that lost the most locations were Econo Lodge (103), Rodeway Inn (71) and Quality (67). The fastest-growing franchises ranking covers every industry.

Who runs a hotel franchise

Of the hotel brands whose agreements are clear, 114 let a trained manager run the business day to day and 2 require the owner to. Initial training typically runs 34 hours, against 71 across all brands. The typical brand loses 1.1% of its franchised locations a year to closures, terminations and non-renewals. On the SBA Franchise Directory are 72 of the 116 brands, so SBA-backed loans are available for them.

Best hotel franchises to own

These hotel brands pass all five tests on the best franchises to own ranking: they grew, lost no more owners than is typical, publish earnings figures, are on the SBA directory and had 100 or more US locations three years ago.

Before you buy a hotel franchise

Read the property improvement plan, the list of renovations a brand requires to convert a hotel or renew its agreement; it can cost more than the fee many times over. Hotel agreements usually run far longer than other franchises, and leaving early can trigger large liquidated damages. Ask about the total of all fees as a share of room revenue, not only the royalty, and whether the brand protects an area around your hotel.

Most hotel owners don’t run the property day to day; see the semi-absentee franchises and the agreement terms guide for how long hotel contracts run.