Radisson Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$9,901,500 - $57,222,500
Franchise Fee
$15,000
Total US Locations
52
Business Summary
Radisson is a full-service hotel brand that provides lodging services to the public. Radisson Hotels offer functional guestrooms and upscale on-site services such as modern fitness facilities, restaurants, bars, and free Wi-Fi, catering to travelers seeking simplicity, authenticity, and modern amenities. Radisson franchises are offered in three different classes: resort, suite, and hotel, each designed for a slightly different segment of travelers.
Corporate History
Choice Hotels International, Inc. originated in 1939 when seven independent motel owners in Florida formed Quality Courts United, which became the nation's first hotel chain in 1941. In January 1963, it formally became a for-profit corporation, Quality Courts Motels, Inc. The company changed its name to Choice Hotels International, Inc. on July 25, 1990, and has used this name since October 15, 1997. Choice Hotels International, Inc. expanded its franchise system through the development of various hotel brands and international operations, which began around 1958 through indirect subsidiaries. In August 2022, Choice Hotels International, Inc. acquired Radisson Hospitality, LLC, and its subsidiaries (collectively 'Radisson'), obtaining the rights to the Radisson brands in the Americas. Choice Hotels International, Inc. began offering franchises under the Radisson marks in April 2023, succeeding Radisson Hotels International, Inc. which franchised the Radisson brand from 1983 to 2023.
Financial Overview
Investment Range
$9,901,500 - $57,222,500
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$150,000
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$1,181,250
Equipment Costs (High)
$10,500,000
Working Capital
$1,400,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Choice Hotels International, Inc. has received an unqualified audit opinion on its consolidated financial statements for the years ended December 31, 2024, 2023, and 2022, indicating that the financial statements are presented fairly in all material respects according to U.S. GAAP. Auditors noted the complexity of accounting for the Choice Privileges Loyalty Program as a critical audit matter, but this relates to auditing methodology rather than the company's financial stability. The company's management and legal counsel do not expect any current legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flows. The company has policies to manage potential shortfalls in the franchise system's marketing and reservation funds, and its investments in affiliates show stability, with only minor impairment charges in 2022.
Financing Details
Radisson offers several financing options. Franchisees may receive financing for the affiliation fee without interest, typically due in a lump sum within three months, subject to credit approval. Radisson may also provide selective capital support to help offset hotel development and opening costs, structured as forgivable promissory notes amortized over 10 to 20 years, with no interest unless there is a default. An Incentive Program is available for underrepresented entrepreneurs and veterans, offering $3,000 per room (up to $300,000) via a 10-year forgivable promissory note, or a 5-year note for 50% of the amount (up to $150,000). These incentive notes are forgivable if the franchisee remains in good standing, but the full unforgiven balance plus interest (prime plus 2%, or prime plus 7% if further defaulted) becomes due upon certain defaults. Additionally, franchisees qualifying for the Incentive Program who re-license an existing Radisson hotel receive a 50% discount on the affiliation fee. Radisson also has non-exclusive agreements with third-party lenders like PMC Commercial Trust, Balboa Capital Corporation, and Ascentium Capital LLC, who may offer conventional and lease financing for various costs, but these are third-party offerings, not direct franchisor financing.
Performance Metrics
Total US Locations
52
Franchised Units
46
Corporate Units
6
Franchising Since
1958
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
77
Litigation Summary
Radisson has been involved in several legal disputes. Two class-action lawsuits are currently pending: one from 2014 alleging wrongful collection of destination marketing fees in Canada, with Radisson seeking contribution from franchisees; and another from 2020 by approximately ninety current and former franchisees alleging discriminatory and anti-competitive practices, civil rights violations, and breach of contract. Two additional cases filed in 2023 and 2024 by franchisees also allege breach of contract, misuse of data, and other violations, with motions pending in court. Furthermore, Choice Hotels International, Inc. initiated 69 actions in 2024 to recover royalties, liquidated damages, and other debts from franchisees. In resolved litigation, Choice Hotels International, Inc. settled a 2018 breach of contract claim in 2021 by paying a former franchisee $85,000. In two arbitrations filed in 2021, one resulted in a final judgment of $779,398.40 against Choice Hotels International, Inc. in March 2024, and the other concluded in January 2024 with Choice Hotels International, Inc. having to pay $882 for breach of contract, while the franchisee had to pay Choice Hotels International, Inc. over $600,000 in attorney's fees and costs. Another arbitration initiated by Choice Hotels International, Inc. in 2021 resulted in an award in July 2024 where Choice Hotels International, Inc. prevailed on claims for unpaid fees totaling $256,051.37, but the franchisee prevailed on a wrongful termination claim for over $4.4 million and was awarded over $430,000 in fees and costs.
Bankruptcy History
Radisson has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Radisson does not offer renewal or extension of the franchise agreement after the initial term expires, therefore there are no renewal conditions.
Training & Support Program
Franchisor Assistance
Radisson provides extensive assistance, including pre-opening support for site selection and approval, and construction guidance such as architect meetings, plan review, and a mandatory model room approval. An Onboarding Project Manager and Opening Services Manager are assigned to monitor project progress, assist with contractual milestones, enroll the hotel in marketing programs, and coordinate training. Choice Hotels International, Inc. makes its Rules and Regulations available electronically and administers quality assurance programs through periodic visits and guest satisfaction surveys, advising on necessary hotel or operational changes. The franchisor offers an advance reservation system, national and regional advertising, promotional programs, and directory listings. It also provides and requires franchisees to use various computer hardware and software systems including ORACLE Opera Cloud PMS, Toast Inc. point-of-sale systems, FinTech beverage invoicing software, a Business Center Solution System, Sales Account Management and Sales Activity Software, Medallia Concierge, and custom music and scent systems. Ongoing assistance includes new hotel revenue ramp guidelines, quality assurance reviews with potential penalties for non-compliance, continuous marketing and reservation services, and an annual mandatory convention for franchisees and their General Managers. Additionally, Radisson provides unlimited access to its online learning management system, Choice University, and reviews and approves changes in sleeping room count.
Initial Training Hours
59
Training Location
Corporate headquarters in North Bethesda, Maryland
Ongoing Support
After opening, Radisson provides ongoing support through several channels. A dedicated team assists with optimizing sales and marketing plans for new hotels. Quality assurance programs include periodic visits and guest satisfaction surveys, offering advice on compliance, with penalties for non-compliance including mandatory training or reservation suspension. Radisson administers an advance reservation system and provides national, international, and regional advertising, promotion, publicity, marketing research, and system programs. It also manages directory listings and offers voluntary marketing cooperatives. Ongoing technological support is provided for systems such as ORACLE Opera Cloud PMS (included in the subscription fee), the Business Center Solution System (24/7 technical support), Sales Account Management and Sales Activity Software, and Medallia Concierge. Franchisees and their General Managers are required to attend an annual convention, and unlimited access to the Choice University online learning management system is provided through an Educational Resources Program. The franchisor also offers additional consultation services for a fee and reviews requests for changes in the hotel's sleeping room count. Through its Fair Franchising Policy, Radisson offers an Ombudsperson and Vice President of Owner & Portfolio Strategy for dispute resolution and consults with franchisee associations on certain marketing campaigns and fee changes.
Franchise Requirements
Ideal Candidate Profile
Radisson seeks franchisees who meet its current qualifications, including a standard credit review. Ideal candidates must be majority owners actively engaged in the deal process. For individuals, Radisson looks for characteristics and backgrounds that contribute to broadening access to its franchise system and the hospitality industry, or veteran status with an honorable discharge. For legal entities, at least 51% ownership must be by individuals meeting these criteria. While Radisson does not require franchisees to personally participate in the direct daily operation of the hotel, it mandates contracting with an approved hotel management company. Transferees must meet educational, managerial, and business standards, possess good moral character, business reputation, and credit rating, and have the experience, aptitude, and financial resources and capital to operate the hotel.
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
Staffing Notes
Radisson Hotels require a specific management structure for operations. At a minimum, each hotel should have a General Manager, Assistant General Manager, Director of Sales, Executive Housekeeper, Maintenance Engineering Leader, and an F&B Leader. The General Manager must be certified and cannot manage any other hotel. A full-time Director of Sales is required on-site, dedicating at least forty hours per week to sales. This Director of Sales must have a minimum of two years of experience in the upscale segment or above, or three years as a Business Travel or Groups Sales Manager at a Radisson Hotel or equivalent upscale property. A qualified Director of Sales must be hired at least six months before a new hotel opens and within two months if the position becomes vacant. Additionally, a full-time Director of F&B must be on-site, exclusively dedicated to F&B leadership duties. Franchisees are required to contract with an approved hotel management company to operate the hotel, and this company can be replaced if it fails to meet franchise agreement requirements.