Radisson Blu Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$24,410,500 - $147,220,000
Franchise Fee
$100,000
Total US Locations
3
Business Summary
Radisson Blu hotels offer upper upscale lodging services to the public. These hotels focus on minimalist design, prioritizing comfort and distinctiveness in guestrooms, unique dining concepts, multipurpose workspaces with complimentary Wi-Fi and smart TVs, and wellness facilities. Radisson Blu provides a stay that combines style with substance and innovation in an elevated environment, aiming to transcend the ordinary lodging experience.
Corporate History
Choice Hotels International, Inc. traces its origins back to 1939 when seven independent motel owners in Florida formed Quality Courts United, establishing the nation's first hotel chain with a focus on quality standards and guest referrals. In January 1963, the organization formalized as a for-profit corporation, Quality Courts Motels, Inc., expanding to include a training school and central reservations system. Over the years, the company grew, developed additional hotel brands, and was renamed Choice Hotels International, Inc. in 1990. Choice Hotels International, Inc. has engaged in international franchising through subsidiaries since approximately 1958. A significant event in its recent history was the acquisition of Radisson Hospitality, LLC and its subsidiaries in August 2022, which expanded its portfolio to include brands like Radisson Blu. Radisson Blu specifically began offering franchises as of April 2023.
Financial Overview
Investment Range
$24,410,500 - $147,220,000
Franchise Fee (Low)
$100,000
Franchise Fee (High)
$225,000
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$18,645,000
Equipment Costs (High)
$131,752,500
Working Capital
$2,750,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Choice Hotels International, Inc., Radisson Blu's parent company, received an unqualified audit opinion from Ernst & Young LLP for its consolidated financial statements as of December 31, 2024. A critical audit matter highlighted the complexity of accounting for the Choice Privileges Loyalty Program. As of December 31, 2024, Choice Hotels reported negative shareholders' equity of $(45,271) thousand, indicating that its total liabilities slightly exceed its assets, a shift from positive equity in the previous year. However, the company's net income increased to $299,665 thousand in 2024, and cash and cash equivalents also rose to $40,177 thousand. The company's long-term debt increased significantly to $1,768,526 thousand in 2024.
Financing Details
Radisson Blu's franchisor, Choice Hotels, may offer direct financing for the affiliation fee, without interest, at its sole discretion and based on the franchisee's credit approval. If offered, franchisees must sign a promissory note, and the full amount is typically due in a single payment within three months. If a default occurs, the note may accelerate, and a default annual interest rate of 18% (or 10% in California) may apply, along with costs and attorneys' fees. Choice Hotels may also provide 'Selected Capital Support' as a forgivable promissory note to franchisees developing strategically important properties. This support can be up to $500,000 per hotel and is amortized over 10 to 20 years, becoming fully forgiven if no defaults occur. If a default happens, the remaining unforgiven balance becomes immediately due with interest at prime plus two percent. A 5-year forgivable note option is also available for a reduced incentive, up to $250,000. These capital support notes often require personal guarantees from owners and may involve waiving mutual termination rights in the franchise agreement. In addition to direct financing, Choice Hotels has non-exclusive agreements with third-party lenders like PMC Commercial Trust, Balboa Capital Corporation, and Ascentium Capital LLC. These lenders may offer conventional and Small Business Administration (SBA) financing for costs such as the affiliation fee, real estate, construction, equipment, and working capital. The terms, interest rates (which can be variable or fixed), repayment schedules, and collateral requirements are determined by these third-party lenders, who often require personal guarantees. Choice Hotels receives flat annual payments from these third-party lenders in exchange for marketing access, but franchisees are not required to use them.
Performance Metrics
Total US Locations
3
Franchised Units
1
Corporate Units
2
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
64
Litigation Summary
Radisson Blu's parent company, Choice Hotels, is involved in several ongoing and resolved legal disputes. Four cases are currently pending. One, filed in December 2014, alleges wrongful collection of destination marketing fees in Canada, with a demand for $403,000,000 in restitution and damages. Another, initiated in June 2020 by approximately ninety franchisees, claims discriminatory practices, anti-competitive behavior, and violations of federal and state laws; this case is currently stayed pending individual arbitration. More recently, a June 2023 case accuses Choice Hotels of breaching a license agreement and misappropriating guest data, while an October 2024 complaint alleges a fraudulent rebate scheme, misuse of system fees, and contract violations. In the past fiscal year (2024), Choice Hotels initiated 56 separate actions, primarily arbitrations, to recover unpaid royalties, liquidated damages, and other debts from franchisees. Four cases were resolved in the past fiscal year: one settlement in August 2021 where Choice Hotels paid $85,000 to a former franchisee; two arbitrations from June 2021 resulting in significant judgments, one against Choice Hotels for over $779,000 (confirmed March 2024) and another finding a franchisee owed Choice Hotels over $600,000 for attorneys' fees (confirmed January 2024); and a July 2024 arbitration award where Choice Hotels prevailed on some claims for $256,051.37, but the franchisee prevailed on a wrongful termination claim for over $4.4 million and was awarded $430,125.87 in fees and costs.
Bankruptcy History
Radisson Blu's franchisor, Choice Hotels, has no bankruptcy information to disclose in its Franchise Disclosure Document.
Agreement Terms
Initial Term
20 years
Training & Support Program
Franchisor Assistance
Radisson Blu's franchisor, Choice Hotels, provides comprehensive pre-opening and ongoing assistance to its franchisees. Before opening, Choice Hotels assists with site selection approval and architectural plan review. An Onboarding Project Manager and Opening Services Manager monitor project progress, help meet contractual milestones, enroll the hotel in marketing programs, and coordinate training. They also assist with pre-opening sales/marketing and departmental action plans to ensure the hotel is ready for its first Quality Assurance Review. For training, Choice Hotels requires the General Manager and Director of Sales to attend a 3-day Upscale Immersion Program at its North Bethesda, Maryland corporate headquarters, costing $2,450 per attendee (excluding travel, lodging, and meals). The General Manager must also complete a self-paced virtual Hospitality Operations Success Training (HOST) leadership certification for $1,395 per attendee. Attendance at the annual convention is also mandatory. For re-licensed hotels, a customized remote training is provided via Choice University's online learning management system for $995. Post-opening, Choice Hotels offers new hotel revenue ramp guidelines and support, including assistance with optimizing sales and marketing plans. They administer a quality assurance program through periodic hotel visits and guest satisfaction surveys, providing guidance on necessary improvements. Marketing and reservation services are provided via a centralized system, funded by a monthly Marketing and Reservation Fee, covering advertising, promotion, and publicity across various media. Choice Hotels also mandates the use of specific technology systems, including the ORACLE Opera Cloud PMS (with initial costs ranging from $14,000 to $40,000 and monthly fees of $4.85 to $8 per room), a Toast, Inc. point-of-sale system for food and beverage operations ($6,000 to $25,000 annually), and FinTech beverage invoicing software ($500 to $800 annually). Other required systems include a Business Center solution, Sales Account Management and Sales Activity Software (such as Delphi.fde), a web-based service recovery and maintenance system, the Medallia Concierge text messaging platform, and custom music and scent systems.
Initial Training Hours
59
Training Location
Corporate headquarters in North Bethesda, Maryland
Ongoing Support
Radisson Blu's franchisor, Choice Hotels, provides various ongoing support services once the hotel is operational. This includes new hotel revenue ramp guidelines and support, with a designated Upscale team assisting with sales, marketing, and revenue optimization plans. Choice Hotels administers a quality assurance program through periodic hotel visits and guest satisfaction surveys, advising on necessary improvements. Marketing and reservation services are provided via a centralized system, funded by the monthly Marketing and Reservation Fee, covering national, international, and regional advertising, promotion, and publicity across various media. Franchisees are encouraged to conduct local marketing and participate in loyalty programs. Choice Hotels also mandates the use of specific technology systems for ongoing operations, such as the ORACLE Opera Cloud PMS, a Toast, Inc. point-of-sale system, FinTech beverage invoicing software, a Business Center solution, Sales Account Management and Sales Activity Software, a web-based service recovery and maintenance system, and the Medallia Concierge text messaging platform. Franchisees are also required to attend an annual convention.
Franchise Requirements
Ideal Candidate Profile
Radisson Blu's franchisor, Choice Hotels, seeks franchisees who demonstrate strong educational, managerial, and business standards. Ideal candidates should possess a good moral character, business reputation, and credit rating. They must have the experience, aptitude, and ability to operate a hotel, along with adequate financial resources and capital. While Choice Hotels does not require the franchisee's personal day-to-day involvement, it mandates an effective organizational structure for the hotel. This structure must include a certified General Manager who manages only one hotel, a full-time Director of Sales with at least two years of upscale segment experience, and a full-time Director of Food & Beverage on site. Franchisees are also required to contract with an approved hotel management company to operate their hotel.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Absentee Allowed
Territory Type
Non-Exclusive
Staffing Notes
Radisson Blu hotels require a specific management team on-site. This includes a certified General Manager, who must not manage any other hotel. A full-time Director of Sales is mandatory and must have at least two years of experience in the upscale segment or three years as a Business Travel or Groups Sales Manager of a Radisson Blu Hotel or equivalent. The Director of Sales must be hired a minimum of six months prior to the hotel's opening and within two months of the position becoming vacant. A full-time Director of Food & Beverage is also required on-site, dedicated solely to that role. Franchisees are required to contract with an approved hotel management company to manage and operate the hotel.