HomeTowne Studios by Red Roof Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$420,000 - $14,843,155
Franchise Fee
$10,000
Total US Locations
84
Business Summary
HomeTowne Studios hotels operate guest lodging facilities that provide hotel rooms and amenities for extended stays, temporary housing, or transient visits. These hotels offer economy extended stay accommodations and transient lodging, operating under various HomeTowne Studios brand names such as HomeTowne Studios by Red Roof, HomeTowne Studios & Suites by Red Roof, HomeTowne Inn, or HomeTown Inn.
Corporate History
HomeTowne Studios, LLC was formed in October 2017 as a Delaware limited liability company and began offering franchises in July 2018 under the HomeTowne Studios by Red Roof brand. It later introduced HomeTown Inn and HomeTowne Inn franchises in April 2020, and HomeTowne Studios & Suites franchises in April 2021. The HomeTowne Studios brand originally operated as "Crossland Suites" until it was acquired by DW Crossland Owner, LLC (an affiliate of the ultimate parent, WRRH, LP) in December 2015. HomeTowne Studios, LLC's parent company is Red Roof Franchising, LLC, which has been operating the Red Roof Inn System since 1973 and offering franchises since 1996.
Financial Overview
Investment Range
$420,000 - $14,843,155
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$30,000
Royalty %
5.5%
Marketing %
3%
Equipment Costs (Low)
$143,000
Equipment Costs (High)
$1,329,000
Working Capital
$133,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Red Roof Franchising, LLC, the parent company of HomeTowne Studios, LLC, shows healthy financial performance with consistent net income over the past three years (2022-2024) and positive cash and cash equivalents. The auditors issued an unqualified opinion, indicating the financial statements present fairly in all material respects. However, Red Roof Franchising, LLC and its parent company are involved in 205 legal matters, including 66 filed lawsuits related to alleged sex trafficking incidents at franchised hotels. While the potential outcome or range of loss for these cases cannot be estimated and could be significant, the company does not believe these will result in a material liability to its combined financial position or liquidity.
Financing Details
HomeTowne Studios, LLC does not offer any direct or indirect financing to franchisees, nor does it guarantee any franchisee notes, leases, or other obligations. Franchisees must secure their own funding.
Performance Metrics
Total US Locations
84
Franchised Units
45
Corporate Units
39
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
5
Litigation Summary
HomeTowne Studios, LLC itself has no litigation to disclose. However, its affiliate, Red Roof Franchising, LLC, and its parent, Red Roof Inns, Inc., have been involved in several legal matters. There is a pending lawsuit, HP Holding LLC v. Red Roof Inns, Inc. and Red Roof Franchising, LLC, filed in October 2023, where a former franchisee alleges breach of contract, tortious interference, and violations of franchise law. The court allowed an amended complaint in February 2025. Red Roof Franchising, LLC is vigorously defending these claims. Two collection actions were filed by Red Roof Franchising, LLC in 2024 against franchisees in Georgia and Texas. Additionally, in 2014, Red Roof Franchising, LLC resolved an inquiry by the Maryland Securities Commissioner via a Consent Order regarding an inadvertent registration and disclosure violation. The General Counsel of HomeTowne Studios, LLC was also previously involved with a company, ASTECH Engineered Products, Inc., that filed for Chapter 11 bankruptcy reorganization in July 2022, which concluded with a liquidation plan in May 2024.
Bankruptcy History
The General Counsel for HomeTowne Studios, LLC, Gerrod Bede, previously served as General Counsel for ASTECH Engineered Products, Inc. ASTECH filed for Chapter 11 bankruptcy reorganization on July 15, 2022. A plan for liquidation was confirmed on May 20, 2024. No other bankruptcy information is required to be disclosed for HomeTowne Studios, LLC.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew the franchise for an additional ten-year period, HomeTowne Studios franchisees must submit a renewal application between 12 to 18 months before the initial term ends. Upon preliminary approval, franchisees must not be in default of any agreement with HomeTowne Studios, LLC or its affiliates, and must have timely paid all monetary obligations throughout the initial term. Six months before the term ends, the franchisee's Manager and any other designated employees must complete current training requirements. The franchisee must also agree to upgrade the Hotel to current standards, including structural changes, remodeling, and redecoration, at their own expense, with all upgrades completed by the end of the initial term. Additionally, franchisees and their owners must sign a general release of claims against HomeTowne Studios, LLC and its affiliates, pay a renewal fee equal to 50% of the then-current initial franchise fee, and execute HomeTowne Studios, LLC's then-current form of franchise agreement, which may have materially different terms.
Training & Support Program
Franchisor Assistance
HomeTowne Studios, LLC provides various forms of assistance to its franchisees. Before opening, HomeTowne Studios, LLC approves the hotel site, provides initial training for a fee, loans or electronically posts the confidential Manuals, designates computer and data communication systems, reviews renovation or construction plans, and inspects the hotel for compliance with standards before authorizing its opening. During operation, HomeTowne Studios, LLC offers initial and continuing training, consultation, and advisory assistance in hotel management and marketing, for which fees apply. It also establishes and maintains a Reservation System and Marketing Program, and coordinates advertising, marketing, and promotions, sometimes combined with other Red Roof Inn System brands. HomeTowne Studios, LLC may also develop new products or services that franchisees will be required to offer. Field support is provided by a Regional Vice President of Operations or Franchise Operations Director during construction/renovation and throughout the agreement term.
Initial Training Hours
55
Training Location
HomeTowne Studios, LLC offers training through live webinars, on-demand learning modules, at its corporate offices in New Albany, Ohio, and on-site at the franchisee's hotel.
Ongoing Support
HomeTowne Studios, LLC provides ongoing support to its franchisees after opening. This includes continuing training, consultation, and advisory assistance in hotel management and marketing. Franchisees are required to participate in a Continuing Education Program with an annual fee, and may be required to attend additional training, conferences, and regional brand meetings. If a hotel fails to meet quality and guest satisfaction standards, franchisees or their managers will be required to attend on-site quality training and may face unannounced on-site quality and property improvement plan audits, incurring escalating fees for continued failure. HomeTowne Studios, LLC also maintains a Reservation System and Marketing Program, provides IT support including a help desk and hardware/software maintenance for a monthly fee, and requires participation in guest loyalty programs. Field support is provided by a Regional Vice President of Operations or Franchise Operations Director who is the primary source of field support.
Franchise Requirements
Ideal Candidate Profile
HomeTowne Studios, LLC offers franchises to both new operators building new hotels and existing hotel operators converting properties. It encourages Women-Owned and Veteran-Owned Businesses through an incentive program, defining them as entities at least 51% owned, operated, and controlled daily by one or more females or honorably discharged veterans, respectively. While the franchisor does not require the owner to personally supervise the business, the hotel must be directly supervised on-premises by a manager who has successfully completed the RED Advantage Training Program and meets specified requirements in the Manuals.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
absentee-allowed
Territory Type
limited
Territory Size Requirements
HomeTowne Studios, LLC defines its franchise territories, known as Exclusive Territories, based on negotiations that consider several factors. These factors include the number of guest rooms, the total number of guest rooms of competing motels or hotels in the area, demand generators, population density, proximity to transportation options, traffic patterns, access, visibility, and HomeTowne Studios, LLC's future development plans. The size of an Exclusive Territory can vary, ranging from as small as one or two city blocks to as large as a small town.
Staffing Notes
HomeTowne Studios, LLC requires that each hotel be directly supervised on-premises by a manager who has successfully completed the franchisor's RED Advantage Training Program and complies with Manual specifications. Franchisees are solely responsible for all employment decisions, including hiring, firing, training, compensation, and scheduling of their employees. Franchisees must specify to employees that they are employed by the franchisee, not HomeTowne Studios, LLC or its affiliates. Initial on-site training is provided for all guest service representatives and the management team. HomeTowne Studios, LLC may designate training requirements for certain management positions but does not control or supervise the franchisee's employees.