Rodeway Inn Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$131,545 - $692,145
Franchise Fee
$2,500
Min Cash Required
$10,000
Total US Locations
447
Business Summary
Rodeway Inn offers hotel franchises for the construction and operation of budget-segment hotels. Rodeway Inn hotels are designed for value-oriented travelers, providing a welcoming and efficient environment at an economy price.
Corporate History
Choice Hotels International, Inc., the franchisor of Rodeway Inn, began its business in 1939 when seven independent motel owners in Florida formed a group to share best practices. This group formalized into a membership association called Quality Courts United in 1941, creating the nation's first hotel chain. In 1963, the organization became a for-profit corporation, Quality Courts Motels, Inc. The company changed its corporate name to Choice Hotels International, Inc. in 1990 and has expanded its franchise system by developing additional hotel brands and entering new markets. Rodeway Inn hotels specifically began offering franchises in 1990. Choice Hotels also operates internationally through various subsidiaries and master franchising relationships, and acquired Radisson Hospitality, LLC and its subsidiaries in 2022, adding several brands to its portfolio.
Financial Overview
Investment Range
$131,545 - $692,145
Franchise Fee (Low)
$2,500
Franchise Fee (High)
$22,875
Minimum Cash Required
$10,000
Royalty %
5%
Marketing %
3.5%
Equipment Costs (Low)
$53,400
Equipment Costs (High)
$375,050
Working Capital
$17,500
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 financial statements, indicating they are presented fairly. However, the auditors identified the accounting for the Choice Privileges Loyalty Program as a critical audit matter due to the complexity of the models and high volume of data involved in estimating redemption rates and recognizing related revenues and liabilities. According to the consolidated balance sheets, Choice Hotels International, Inc. had a total shareholders' (deficit) equity of $(45,271) thousand as of December 31, 2024, indicating liabilities exceeded assets in shareholder equity.
Financing Details
Rodeway Inn, through Choice Hotels International, Inc., offers several financing options. Choice Hotels may, at its sole discretion and credit approval, finance the affiliation fee without interest, typically due in a lump sum within three months, with an 18% default interest rate if not paid on time. Choice Hotels may also provide selected capital support for properties deemed strategically important. This support is provided via a forgivable promissory note, amortized over 10 or 20 years, with interest at prime plus 2% only upon default. An incentive program for underrepresented entrepreneurs and veterans offers $1,000 per room (up to $50,000) for new construction or conversion hotels, structured as a 10-year forgivable promissory note. A 5-year option offers 50% of the incentive (up to $25,000). Re-licensing an existing Rodeway Inn hotel can qualify for a 50% discount on the affiliation fee. Choice Hotels also has agreements with third-party lenders like PMC Commercial Trust, Balboa Capital Corporation, and Ascentium Capital LLC, who may offer various conventional and lease financing options to franchisees for costs such as the affiliation fee, site acquisition, construction, and equipment.
Performance Metrics
Total US Locations
447
Franchised Units
447
Corporate Units
0
Franchising Since
1990
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
94
Litigation Summary
Choice Hotels International, Inc., the franchisor of Rodeway Inn, has a history of litigation, both pending and resolved, involving its franchise relationships. There are four significant pending civil actions or arbitration demands. These include a class action lawsuit in Canada alleging wrongful collection of destination marketing fees, an anti-competitive and discriminatory practices lawsuit by approximately ninety current and former franchisees, a breach of contract and misappropriation of guest data lawsuit, and a recent complaint alleging a fraudulent rebate scheme, misuse of system fees, and breach of contract. Most of these pending cases are subject to arbitration or ongoing court proceedings. Additionally, Choice Hotels initiated 86 actions in the prior fiscal year (2024) to recover royalties, liquidated damages, and other debts from franchisees. Four significant cases were resolved in the prior fiscal year, with outcomes ranging from settlements paid by Choice Hotels to judgments against or in favor of Choice Hotels, sometimes involving substantial amounts.
Bankruptcy History
Rodeway Inn, as part of Choice Hotels International, Inc., has no bankruptcy history to report according to Item 4 of its FDD.
Agreement Terms
Initial Term
20 years
Renewal Conditions
Rodeway Inn franchisees have no provision for renewal or extension of the franchise agreement after its initial 20-year term expires.
Training & Support Program
Franchisor Assistance
Rodeway Inn, through Choice Hotels International, Inc., provides comprehensive support to its franchisees before and after a hotel's opening. Pre-opening assistance includes site approval, with Choice Hotels reviewing factors like location, market, and revenue potential, and providing feedback on architectural designs for brand standard compliance. An Onboarding Project Director and Opening Services Manager assist with project progress, milestones, marketing program enrollment, and training coordination. Training programs include a 3-day 'Choice Onboard' orientation and a 'Hospitality Operations Success Training (HOST)' operator certification program for general managers and managerial staff. Re-licensing training is also offered remotely. Post-opening assistance includes a quality assurance program with periodic hotel visits and guest satisfaction surveys, an advance reservation system, national and regional advertising, promotion, and marketing research. Franchisees also receive ongoing remote support for the choiceADVANTAGE® Property Management System, including software enhancements and configuration services. Additional optional training programs and regional workshops are available.
Initial Training Hours
47
Training Location
Corporate headquarters in North Bethesda, Maryland, or Scottsdale, Arizona; some training is also offered virtually.
Ongoing Support
After opening, Rodeway Inn franchisees receive continuous quality assurance support, including periodic hotel visits and guest satisfaction surveys to ensure compliance with brand standards and address any deficiencies. Choice Hotels International, Inc. manages marketing and reservation services, providing an advance reservation system and national, international, and regional advertising, promotion, and marketing research, all funded by the monthly Marketing and Reservation Fee. Franchisees also get ongoing remote support for the choiceADVANTAGE® Property Management System, including software enhancements and configuration services. Additional optional training programs and regional workshops are available throughout the year.
Franchise Requirements
Ideal Candidate Profile
Rodeway Inn, through Choice Hotels International, Inc., seeks franchisees who are majority owners actively engaged in the deal process. Ideal candidates include individuals or entities whose characteristics and background contribute to broadening access to the hospitality industry, such as underrepresented entrepreneurs or honorably discharged veterans. Preference may also be given to multi-unit franchisees, those with larger properties, or those previously associated with other hotel chains. All candidates must meet Choice Hotels' current qualifications for new franchisees, including a standard credit review.
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
Territory Size Requirements
Rodeway Inn territories are defined by an "Area of Enhanced Protection" based on radial miles from the hotel. The size of this protected area varies depending on the hotel's market category and location. For example, in primary airport markets, the territory is 1 radial mile, while in tertiary airport markets, it is 7 radial miles. Urban markets can range from 0.5 miles to 5 miles, and highway, resort, suburban, or small town metro markets can range from 1 to 7 radial miles.
Staffing Notes
Rodeway Inn franchisees are not required to personally participate in the direct operation of the hotel. However, Rodeway Inn does require that each hotel has a certified General Manager. This General Manager must complete mandatory training programs, including the "Choice Onboard" orientation and the "Hospitality Operations Success Training (HOST)" operator certification program.