Park Inn Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$267,445 - $1,416,145
Franchise Fee
$15,000
Total US Locations
27
Business Summary
Park Inn offers the right to operate a hotel that provides lodging services to the public under the brand names Park Inn or Park Inn by Radisson. These hotels provide a distinctive identity, trade dress, methods, and systems for delivering hotel services.
Corporate History
Choice Hotels International, Inc. began in 1939 as Quality Courts United, a membership association formed by seven independent motel owners in Florida. In 1941, it formalized into the nation's first hotel chain. By January 1963, the organization became a for-profit corporation named Quality Courts Motels, Inc. The company changed its name to Choice Hotels International, Inc. in 1990 and again in 1997, expanding its franchise system through additional hotel brands and new markets. International franchise operations began around 1958. In August 2022, Choice Hotels International, Inc. acquired Radisson Hospitality, LLC, including the Park Inn brand, and subsequently began offering franchises under the Park Inn brand in April 2023.
Financial Overview
Investment Range
$267,445 - $1,416,145
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$45,000
Royalty %
5.5%
Marketing %
3.25%
Equipment Costs (Low)
$108,800
Equipment Costs (High)
$772,050
Working Capital
$27,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Choice Hotels International, Inc. has demonstrated consistent net income over the past three years, with figures around $300 million annually. The company's cash and cash equivalents have also shown an increase. However, a notable concern in its financial health is the reported deficit in shareholders' equity, which stood at ($45.3) million in 2024, a decline from a positive $35.6 million in 2023. This negative equity position indicates that the company's total liabilities exceeded its total assets in 2024, despite its profitable operations and positive cash flow.
Financing Details
Choice Hotels International, Inc. offers several financing options to its franchisees for Park Inn hotels. Franchisees may be eligible for an Affiliation Fee Promissory Note, allowing them to finance the affiliation fee without interest. This note typically requires a lump-sum payment within three months, with an 18% default interest rate if not paid on time, and may require personal guarantees. Choice Hotels International, Inc. may also provide Selected Capital Support for properties deemed strategically important. This support is evidenced by a forgivable promissory note (Exhibit H.A.) that is amortized over 10 to 20 years, becoming fully forgiven if the franchisee remains in good standing. A default interest rate of prime plus 2% applies if the franchisee defaults, and personal guarantees may be required. Accepting this capital support may also mean waiving the right to terminate the franchise agreement without cause on certain anniversaries. An Incentive Program is available to encourage diverse entrepreneurship and veteran participation. This incentive provides $1,500 per room, up to a maximum of $150,000, for new construction or conversion hotels (not re-licensing). This is also in the form of a 10-year forgivable promissory note (Exhibit H.B.), paid after the hotel's opening. A 5-year, 50% incentive option (max $75,000) is also available. Default interest is prime plus 2%, increasing to prime plus 7% after 15 days of non-payment. This program also includes a waiver of the 5th-anniversary termination right without cause, unless a 5-year note is chosen. For qualifying franchisees re-licensing an existing Park Inn hotel, a 50% discount on the affiliation fee is offered, but this cannot be combined with other incentive programs. Additionally, Choice Hotels International, Inc. partners with third-party lenders such as PMC Commercial Trust, Balboa Capital Corporation, and Ascentium Capital LLC. These 'Qualified Vendors' may offer conventional and Small Business Administration (SBA) financing for various costs like affiliation fees, site acquisition, construction, remodeling, equipment, and working capital. These loans often require first liens, personal guarantees, and specific dispute resolution venues (e.g., California for Balboa and Ascentium, Dallas, Texas for PMC). Choice Hotels International, Inc. receives an annual flat payment from these lenders for marketing access.
Performance Metrics
Total US Locations
27
Franchised Units
27
Corporate Units
0
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
72
Litigation Summary
Choice Hotels International, Inc. faces numerous ongoing legal and arbitration cases. Four pending lawsuits are detailed: Norma Knuth v. Radisson Hotels International, Inc., a class action from 2014 concerning destination marketing fees, is still active. Jai Sai Baba, LLC, et al. v. Choice Hotels International, Inc., et al., initiated in 2020 by approximately ninety current and former franchisees, alleges discriminatory, anti-competitive practices, Racketeer Influenced and Corrupt Organizations Act, Sherman Act, Civil Rights Act, state franchise law violations, and breach of contract. This case is currently stayed, pending individual arbitration. T&T Management, Inc. v. Choice Hotels International, Inc., et al., commenced in 2023, alleges breach of license agreements and misuse of guest data, and is currently awaiting a court decision on a motion to dismiss. CS Anaheim Hotel Investments, LLC v. Choice Hotels International, Inc., filed in 2024, alleges a fraudulent rebate scheme, misuse of system fees, misrepresentation of the system, and breach of contract, with a motion to compel arbitration currently pending. In addition to these, Choice Hotels International, Inc. initiated 64 arbitration cases in 2024 to recover royalties, liquidated damages, and other debts from franchisees. Four prior cases were resolved in 2024: Sender Kohl v. Choice Hotels International, Inc. (2018) was settled with Choice Hotels International, Inc. paying $85,000. In Highmark Lodging, LLC, et al. v. Choice Hotels International, Inc., et al. (2021), Choice Hotels International, Inc. was ordered to pay $779,398.40. In Dahya Investments Incorporated, et al. v. Choice Hotels International, Inc., et al. (2021), Choice Hotels International, Inc. was awarded $603,483.00 from the franchisee. In Choice Hotels International, Inc. v. DIP Hospitality, LLC, et al. (2021), Choice Hotels International, Inc. received $256,051.37 in unpaid fees, but the franchisee was awarded $4,411,678.56 for wrongful termination and $430,125.87 in fees and costs. Overall, Park Inn has a significant volume of ongoing and recently resolved litigation, primarily concerning franchisee disputes over contract terms and fees.
Bankruptcy History
Park Inn has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Park Inn does not offer a right or option to renew the franchise agreement or extend its term after the initial 20-year period expires.
Training & Support Program
Franchisor Assistance
Park Inn provides a range of assistance to its franchisees, both before and after a hotel opens. Before opening, Choice Hotels International, Inc. assists with site selection approval, reviews and provides comments on preliminary and final architectural designs to ensure they meet brand standards. The Opening Services department, led by an Onboarding Project Director and Opening Services Manager, monitors project progress, helps franchisees meet contractual milestones, introduces support departments, enrolls the hotel in marketing programs, and coordinates mandatory training. This support also ensures the hotel is ready for its first Quality Assurance Review. Mandatory training includes the 20-hour 'Choice Onboard' orientation program, held in North Bethesda, Maryland or Scottsdale, Arizona, which covers Choice history, loyalty programs, resources, advocacy, franchise services, staff retention, portfolio strategy, performance metrics, sales tools, distribution, guest insight reporting, brand standards, procurement, and crisis management. General Managers must also complete the 27-hour virtual 'Hospitality Operations Success Training' (HOST) program, which covers online lessons, workshops, and exams on operations, systems, sales, and leadership. For re-licensed hotels, there is a 4-hour customized virtual training program. Optional Sales Certification Training Program and an annual Educational Resources Program are also available. After opening, Park Inn offers ongoing quality assurance programs, including periodic hotel visits and guest satisfaction surveys, with advice on compliance and corrective actions. Choice Hotels International, Inc. manages an advance reservation system and conducts national, international, and regional advertising, promotion, publicity, marketing research, and system programs, all funded by the monthly Marketing and Reservation Fee. Franchisees may also participate in voluntary marketing cooperatives and can conduct local marketing with prior approval. Technology support includes 24/7 remote assistance, updates, remote configuration, and online training for the choiceADVANTAGE® property management system. Additionally, Choice Hotels International, Inc. may form franchise advisory councils composed of franchisees to offer input on system-related issues.
Initial Training Hours
47
Training Location
North Bethesda, Maryland and online/virtual
Ongoing Support
After opening, Park Inn franchisees receive ongoing quality assurance programs, including periodic hotel visits and guest satisfaction surveys, with advice on compliance and corrective actions. Choice Hotels International, Inc. administers an advance reservation system and conducts national, international, and regional advertising, promotional programs, and marketing research, all funded by the monthly Marketing and Reservation Fee. Franchisees may also participate in voluntary marketing cooperatives and can conduct local marketing with prior approval. Technology support includes 24/7 remote assistance, updates, remote configuration, and online training for the choiceADVANTAGE® property management system. Additionally, Choice Hotels International, Inc. may form franchise advisory councils composed of franchisees to offer input on system-related issues.
Franchise Requirements
Ideal Candidate Profile
Park Inn seeks franchisees who meet their current qualifications for new franchisees, including a standard credit review. Candidates should be majority owners actively engaged in the deal process and should have characteristics and background that contribute to broadening access to the franchise system and hospitality industry, or be honorably discharged military veterans. For transfers, Park Inn also looks for transferees who demonstrate educational, managerial, and business standards, possess good moral character, a strong business reputation, a solid credit rating, the necessary experience, aptitude, and ability to operate the hotel, along with adequate financial resources and capital.
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
Non-Exclusive
Territory Size Requirements
Park Inn franchises are granted for specific sites only, and franchisees do not typically receive an exclusive territory. A Park Inn franchisee may face competition from other franchisees, company-owned outlets, or other distribution channels and competitive brands controlled by Choice Hotels. Although Choice Hotels has an Impact Policy for some of its other brands that may grant a first opportunity to develop within a specified radius, this policy does not apply to the Park Inn brand.
Staffing Notes
Park Inn franchisees are required to have a certified General Manager on staff. This manager must complete the Hospitality Operations Success Training (HOST) program offered by Choice Hotels International, Inc. This certification is mandatory for new or replacement General Managers. While the General Manager is not required to have an ownership interest in the hotel, the franchisee is solely responsible for ensuring their employees receive adequate training.