Risk Score
Pending analysis
Investment Range
$195,259 - $8,239,350
Franchise Fee
$25,000
Min Cash Required
$100,000
Total US Locations
1,195
Business Summary
Motel 6 franchises are for the operation of motels offering limited services and amenities, designed to compete in the transient economy segment of the lodging market. Motel 6 properties typically offer services such as lobby coffee, vending areas, limited in-room amenities, and may include guest laundry and swimming pools. Motel 6 may also offer a 'Classic' designation for motels with enhanced finishes and amenities. Franchisees can also operate Motel 6 as part of a Dual Brand Operation with a Studio 6 motel.
Corporate History
G6 Hospitality Franchising LLC, the franchisor for Motel 6, was organized in Delaware in January 2005, originally under the name Accor Franchising North America, LLC, before changing its name in July 2012. Motel 6 began offering franchises for its motels in January 2005. The Motel 6 System itself has been continuously operating since 1962. G6 Hospitality LLC, a parent company that manages operations and provides various franchise services, was organized in 1985 as Motel 6 G.P., Inc. In December 2024, IBL Limited, LLC (the indirect owner of G6 Hospitality Franchising LLC) was purchased by OYO Hotels Inc., a hospitality franchising organization based in India that provides technology platforms and revenue management services.
Financial Overview
Investment Range
$195,259 - $8,239,350
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$25,000
Minimum Cash Required
$100,000
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$27,194
Equipment Costs (High)
$669,988
Working Capital
$130,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Motel 6's financial statements show that the company has consistent net income, reporting $47,008,000 in 2024, $46,716,000 in 2023, and $55,400,000 in 2022. However, its cash and cash equivalents have been decreasing over the past three years, from $36,407,000 in 2022 to $6,215,000 in 2024. This decrease is primarily attributed to substantial cash distributions made to its parent company, which consistently exceed the net income each year. Motel 6 receives significant administrative support from its parent company, G6 Hospitality. The company manages credit risk associated with accounts receivable and has ongoing commitments for franchise development. Auditors have issued an unqualified opinion on the financial statements, and Motel 6 does not believe that any pending legal matters will materially affect its financial condition.
Financing Details
Motel 6 does not offer any direct financing to its franchisees. This means that Motel 6 will not provide loans or guarantees for any loans or leases that a franchisee might obtain. Additionally, Motel 6 does not receive any payments from other parties for helping franchisees secure financing.
Performance Metrics
Total US Locations
1,195
Franchised Units
1,195
Corporate Units
0
Franchising Since
2005
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
7
Litigation Summary
Motel 6 has been involved in several legal disputes. One ongoing case, filed in June 2023, involves MS & Sons Hospitality, LLC alleging breach of contract and unlawful business practices against Motel 6 after their franchise agreement was terminated. Motel 6 filed a counter-suit in September 2023 for breach of contract and was granted a default judgment, with a final hearing to determine damages. Another past case involved Park Property Management, LLC, a former franchisee who sued Motel 6 for breach of contract and fraud after their agreement was terminated in 2016. Motel 6 counterclaimed for breach of guaranty, and the court enforced a settlement in Motel 6's favor, including attorney's fees. Appeals continued until November 2022, when the Utah Supreme Court upheld the settlement. Additionally, Motel 6 Operating, L.P. and G6 Hospitality LLC faced two government actions regarding the disclosure of guest information to federal immigration authorities. A class-action lawsuit in Arizona settled in February 2020, with Motel 6 paying $10 million in damages and agreeing to a three-year consent decree which expired in February 2023. A similar government action in Washington State settled in April 2019, with Motel 6 paying $12 million and agreeing to a three-year consent decree which expired in April 2022. Most recently, Motel 6 initiated a collection action in November 2024 against Aesha LLC, Savita Hospitality LLC, Mukesh Bhakta, and Mukund Patel.
Bankruptcy History
Motel 6 has no bankruptcy history required to be disclosed.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Motel 6 franchisees must be in compliance with their existing agreement and not be in default, and they must have paid all outstanding monetary obligations. Franchisees are required to submit a renewal application, pay an application fee, and then a renewal franchise fee. They must complete any necessary training and agree to a Property Improvement Plan (PIP) to upgrade their property to current brand standards. Finally, franchisees need to sign Motel 6's then-current franchise agreement, which may have different terms and conditions, and execute a general release. For dual brand operations, both the Motel 6 and Studio 6 agreements must be renewed simultaneously for the same period, with consistent ownership, and only one renewal franchise fee will be charged for both motels.
Training & Support Program
Franchisor Assistance
Motel 6 provides significant support to its franchisees both before and after opening. Before a motel opens, Motel 6 assists with site selection and approval, provides prototype plans for new construction, and offers a General Manager training program (included in the Opening Package Fee). Franchisees gain access to online Manuals, receive review of their renovation or construction plans, and can use an e-procurement marketplace for supplies. Motel 6 also provides an email address, arranges a website photo shoot, inspects the motel for compliance before authorizing opening, and offers on-site opening assistance including PMS installation and staff orientation. After opening, Motel 6 continues to administer its Marketing Program and Reservation System, and maintains a brand website. Franchisees can opt for a Premium Property Page or microsite for an additional fee. Motel 6 provides IT technical assistance and software/hardware support for a fee. The company makes available continuing training, tools, consultation, and advisory assistance, which may also incur fees. Motel 6 sets Standards and specifications for goods and services, designates approved suppliers, and conducts regular inspections to ensure compliance with brand Standards.
Initial Training Hours
12.5
Training Location
Corporate headquarters in Dallas, Texas, or online/virtually
Ongoing Support
After opening, Motel 6 provides ongoing support through the administration of its Marketing Program and Reservation System, along with maintaining a brand website. Franchisees have the option to set up a motel-specific Premium Property Page or microsite for an additional fee. Motel 6 offers IT technical assistance, software, and hardware support services for an additional fee. Franchisees can also access continuing training, tools, consultation, and advisory assistance, though these may also involve fees. Motel 6 establishes and updates Standards and specifications for products and services, designates required or approved suppliers, and conducts inspections and evaluations of motel facilities and services to ensure ongoing adherence to these Standards. Motel 6 may provide suggested operational advice or guidance based on these inspections.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Protected
Staffing Notes
Motel 6 requires franchisees to employ a full-time General Manager who is dedicated to the motel's management and operations. This General Manager must successfully complete Motel 6's training program within two months of being hired. Franchisees are not obligated to personally supervise the motel if they have a full-time General Manager. Additionally, for on-site training related to opening or transfers, every guest service representative must attend, with typical class sizes around 8 participants.