Extended Stay America Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$322,659 - $15,123,386
Franchise Fee
$40,000
Total US Locations
49
Business Summary
EXTENDED STAY AMERICA PREMIER SUITES offers franchises for hotels that provide extended stay and transient guest lodging services. These hotels are designed for self-sufficient, value-conscious guests, featuring fully furnished rooms with in-room kitchens, complimentary breakfast, free WiFi, flat screen TVs, and on-site guest laundry. EXTENDED STAY AMERICA PREMIER SUITES caters to a diverse clientele including business travelers, leisure travelers, professionals on temporary assignments, and individuals in need of temporary housing.
Corporate History
ESH Strategies Franchise LLC was formed as a Delaware limited liability company on September 16, 2010. Extended Stay America Premier Suites began operating in the hotel business in early 2016. It started offering franchises for the original EXTENDED STAY AMERICA® hotels from August 2017 through March 2021. In March 2021, the brand mark was updated, and Extended Stay America Premier Suites began offering franchises under the modified EXTENDED STAY AMERICA SUITES® mark, and specifically for the EXTENDED STAY AMERICA PREMIER SUITES brand which features upgraded amenities. In September 2022, it further expanded its offerings to include franchises for the EXTENDED STAY AMERICA SELECT SUITES® brand. Extended Stay America Premier Suites itself has never owned or operated hotels of the type being franchised; these operations are managed by its affiliates. As of March 11, 2024, its affiliate, ESH Hospitality, Inc., owned and operated 572 hotels across these various Extended Stay America brands.
Financial Overview
Investment Range
$322,659 - $15,123,386
Franchise Fee (Low)
$40,000
Franchise Fee (High)
$50,000
Minimum Net Worth
$6,165,500
Royalty %
5.5%
Marketing %
4.5%
Equipment Costs (Low)
$253,759
Equipment Costs (High)
$14,266,981
Working Capital
$125,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for ESH Strategies Franchise LLC are audited and present a stable financial position. In 2024, the company reported a net income of $1,537,000, a positive change from a net loss of $2,172,000 in 2023. Cash and cash equivalents increased to $9,170,000 in 2024. The company saw a slight decrease in total assets to $19,178,000 and a reduction in total liabilities to $10,983,000, largely due to decreased amounts owed to affiliates. Member's capital grew to $8,195,000. The independent auditors issued an 'Unqualified opinion', indicating the financial statements fairly represent the company's financial status. An 'Emphasis of Matter' highlights significant related party transactions with affiliated entities, which are crucial for understanding the financial statements, though this does not alter the audit opinion. No 'going concern' qualifications were noted, suggesting Extended Stay America Premier Suites has adequate resources to continue operations.
Financing Details
Extended Stay America Premier Suites does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any notes, leases, or other financial obligations for franchisees.
Performance Metrics
Total US Locations
49
Franchised Units
17
Corporate Units
32
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Extended Stay America Premier Suites is involved in ongoing antitrust litigation (In re Extended Stay Hotel Antitrust Litigation, including cases filed in July and September 2024). Plaintiffs allege violations of the Sherman Act, claiming the use of common revenue management software by Extended Stay America Premier Suites and other hotel companies artificially raised room rates and suppressed occupancy. These cases were consolidated in September 2024 and transferred to a California court in December 2024, where further proceedings are pending. Extended Stay America Premier Suites denies these allegations and intends to vigorously defend its interests. Additionally, Extended Stay America Premier Suites and its affiliates were defendants in a class-action lawsuit (Latreass "Lisa" Brittian v. ESA Management LLC, et al.), filed in December 2022 and amended in January 2024. The plaintiff alleged unfair practices related to accommodations and refunds. The case was confidentially settled in July 2024 for $100,000, with individual claims dismissed with prejudice and class claims dismissed without prejudice.
Bankruptcy History
Extended Stay America Premier Suites has no bankruptcy history to disclose, as stated in Item 4 of the Franchise Disclosure Document.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Extended Stay America Premier Suites franchisees do not have a right to renew or extend the term of their Franchise Agreement.
Training & Support Program
Franchisor Assistance
Extended Stay America Premier Suites provides comprehensive assistance to its franchisees, starting with pre-opening support. This includes reviewing insurance, site possession, permits, and plans/designs for the hotel. Franchisees receive up to three construction or renovation site visits and up to two IT infrastructure certification visits from the franchisor. A pre-opening visit may also be provided to assist with the hotel's launch, along with the Standards Manual. For ongoing support, the franchisor designates suppliers for furniture, fixtures, equipment (FF&E) and operating supplies and equipment (OS&E), and may offer consultation and advice. It conducts physical and electronic inspections, as well as quality assurance audits, and reviews all marketing materials. The franchisor also maintains the ESA Website for brand promotion, actively promotes the brand's trademarks, and may recommend pricing strategies (though franchisees set their own rates). Extended Stay America Premier Suites also has the right to modify its System and Standards and may require specific administrative, bookkeeping, accounting, and inventory control procedures. For technology, the franchisor requires franchisees to purchase or lease computer systems, property management, revenue management, and other technology systems, and manages the delivery and installation of reservation and property management systems (for a Project Management Fee). For advertising, franchisees must participate in franchisor-led marketing initiatives, funded by a System Services Fee (4.5% of Gross Room Revenue), which is pooled across all brands, and are currently restricted from engaging in their own digital or email marketing. Training includes a mandatory New Owner Orientation (12 hours classroom), General Manager Certification (12-14 hours classroom), Pre-Opening Onsite Training (12 hours on-the-job), and Service Culture Training (1 hour online). Remedial training may be required if quality assurance standards are not met, and franchisees have access to an online learning management system.
Initial Training Hours
39
Training Location
Charlotte, NC
Ongoing Support
After opening, Extended Stay America Premier Suites franchisees may receive consultation and advice services, and the franchisor conducts regular physical and electronic inspections to ensure compliance with standards. The franchisor manages national advertising and marketing initiatives, funded by the System Services Fee, and provides access to an online learning management system (ESU Online) for optional additional training modules. Franchisees must comply with any changes to the System and Standards implemented by the franchisor and are required to provide annual human trafficking awareness training to their hotel associates. The franchisor may also require periodic attendance at System and/or Network conferences. However, the franchisor does not explicitly provide ongoing maintenance, repairs, upgrades, or updates to software, leaving these to the franchisee's responsibility.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
limited
Staffing Notes
Extended Stay America Premier Suites requires the Manager of the hotel (either the franchisee or an approved management company) to employ a full-time, qualified, and competent General Manager. This General Manager must successfully complete the General Manager Certification program and any other required training. If the General Manager fails to meet quality assurance standards, the franchisor may require the appointment of a new General Manager. The franchisee or Manager is responsible for hiring, terminating, and supervising all hotel staff, who are considered the sole employees of the franchisee or Manager. All hotel associates must complete a mandatory one-hour online Service Culture Training course within 90 days of hire and annual human trafficking awareness training. The franchisor may send a trainer to the hotel to assist with pre-opening staff training on brand standards and systems, though this fee may be waived if the franchisee demonstrates capability to train their own staff. The franchisor emphasizes that it does not control employment policies, practices, or decisions related to hotel staff.