Woodspring Suites Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$8,229,200 - $13,293,300
Franchise Fee
$10,000
Total US Locations
256
Business Summary
WOODSPRING SUITES operates extended-stay, limited-service hotels that offer customers furnished rooms with kitchen facilities, along with services and amenities common to extended-stay hotels, such as easy check-in, one-week stays, and periodic housekeeping. WoodSpring Suites targets a diverse customer base, including small business owners, construction workers, medical professionals, families in transition, college students, military personnel, and extended-stay travelers.
Corporate History
Choice Hotels International, Inc. began its business in 1939 when seven independent motel owners in Florida formed Quality Courts United to share best practices and refer guests. In 1941, the group formalized its relationship, creating the nation's first hotel chain. By January 1963, the organization became a for-profit corporation, Quality Courts Motels, Inc., and expanded to include a training school, central reservations, and a hotel directory. The company later changed its name to Choice Hotels International, Inc. and has since developed additional hotel brands and expanded into new markets. In February 2018, Choice Hotels International, Inc. acquired WoodSpring Hotels Franchise Services LLC (WHFS), becoming the sole owner of the WoodSpring Suites brand. WHFS had previously offered extended-stay franchises under the name "VALUE PLACE" from 2004 to 2015, rebranding to "WOODSPRING SUITES" in 2015. Choice Hotels International, Inc. began offering franchises under the WoodSpring Suites trademark in February 2018. Choice Hotels International, Inc. has also expanded internationally since 1958 and acquired Radisson Hospitality, LLC and its subsidiaries in 2022.
Financial Overview
Investment Range
$8,229,200 - $13,293,300
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$148,300
Royalty %
6%
Marketing %
2.5%
Equipment Costs (Low)
$553,800
Equipment Costs (High)
$610,800
Working Capital
$115,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Choice Hotels International, Inc. presents audited consolidated financial statements with an unqualified opinion from Ernst & Young LLP, indicating they present fairly in conformity with U.S. GAAP. 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 performed a qualitative impairment analysis for its Hotel Franchising reporting unit, concluding that the fair value of the unit is not less than its carrying amount, thus no impairment was recorded for goodwill. An impairment loss of $3.4 million was recognized in 2023 on a legacy Radisson corporate office lease, which is a specific asset rather than a systemic issue. No impairment charges were recognized on equity method investments in 2024 and 2023. Overall, the financial statements and notes do not indicate significant financial distress or a going concern qualification for Choice Hotels International, Inc.
Financing Details
WoodSpring Suites offers several financing options. Choice Hotels International, Inc., at its discretion and based on credit approval, may finance the affiliation fee without interest, typically due in a lump sum within three months. If defaulted, the note accrues 18% annual interest (10% in California), and personal guarantees may be required from owners. For strategically important properties, Choice Hotels International, Inc. may provide 'Selected Capital Support' loans, forgivable over 10 or 20 years with straight-line amortization from the hotel's opening date, provided no defaults occur. These loans incur interest only upon default (prime + 2%). Individual owners may also need to provide personal guarantees for these loans. Choice Hotels International, Inc. also runs an 'Incentive Program' for underrepresented entrepreneurs and veterans, offering a 10-year forgivable incentive promissory note of $2,500 per room (up to $175,000). Funds are disbursed after the hotel's opening and can be used for any hotel-related purpose. Forgiveness is amortized straight-line over 10 years, with interest (prime + 2%) only if defaulted. A 5-year option provides 50% of the 10-year incentive (up to $87,500). For re-licensing existing Choice-branded hotels, qualifying franchisees receive a 50% discount on the affiliation fee. Additionally, Choice Hotels International, Inc. has non-exclusive Qualified Vendor agreements with third-party lenders like PMC Commercial Trust, Balboa Capital Corporation, and Ascentium Capital LLC. These lenders offer conventional and SBA financing for various costs including the affiliation fee, site acquisition, construction, remodeling, equipment, and working capital. Choice Hotels International, Inc. receives annual flat payments from these lenders for marketing access.
Performance Metrics
Total US Locations
256
Franchised Units
256
Corporate Units
0
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
78
Litigation Summary
Choice Hotels International, Inc. has a history of both ongoing and recently resolved legal disputes. Currently pending are four significant cases: a class action lawsuit filed in 2014 against Radisson Hotels International, Inc. (now a Choice Hotels International, Inc. subsidiary) concerning undisclosed destination marketing fees in Canada; a 2020 lawsuit from multiple franchisees alleging discriminatory practices, RICO violations, Sherman Act violations, civil rights violations, breach of contract, fraud, and state franchise law violations, which is stayed pending arbitration; a 2023 lawsuit from a franchisee alleging breach of contract, misuse of guest data, and trade secret misappropriation; and a 2024 lawsuit from a franchisee alleging a fraudulent rebate scheme, misuse of system fees, misrepresentation of the system, breach of contract, and California franchise law violations, where a motion to compel arbitration is pending. Additionally, in 2024, Choice Hotels International, Inc. initiated 70 arbitration and district court cases against various franchisees and guarantors to recover unpaid fees, promissory note balances, and liquidated damages. Recently resolved cases (within three years of the FDD's issuance date) include three arbitrations initiated by franchisees in 2021: in one case, Choice Hotels International, Inc. was ordered to pay a franchisee $779,398.40 for breach of contract in March 2024; in another, Choice Hotels International, Inc. was ordered to pay $882 to a franchisee for breach of contract, while the franchisee was ordered to pay Choice Hotels International, Inc. $603,483 for attorney's fees and costs in January 2024; and in a third, a July 2024 award found Choice Hotels International, Inc. prevailed on some claims ($256,051.37), but the franchisee prevailed on a wrongful termination claim ($4,411,678.56) and was awarded $430,125.87 in fees and costs. Management states that they do not expect the ultimate outcome of any current legal proceedings to have a material adverse effect on Choice Hotels International, Inc.'s financial position, results of operations, or cash flows.
Bankruptcy History
WoodSpring Suites has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Conditions
WoodSpring Suites does not offer a right or option to renew or extend the franchise agreement term.
Training & Support Program
Franchisor Assistance
WoodSpring Suites provides comprehensive support to its franchisees, covering both pre-opening and ongoing operations. Before opening, WoodSpring Suites assists with site selection approval, reviewing construction plans for compliance (mandatory for first-time WOODSPRING franchisees), and offers Construction Advisory Services including five site visits for new constructions. An Onboarding Project Director and Opening Services Manager monitor project progress, help meet contractual milestones, assist with marketing program enrollment, and coordinate training. The brand requires a full-time General Manager, exclusive to the hotel, to be hired at least four months prior to opening, and strongly recommends employing a dedicated salesperson. Mandatory training programs include an Owner Immersion Program (12-15 hours of classroom training at headquarters in North Bethesda, Maryland, or Scottsdale, Arizona), a General Manager Operations Certification Program (25 hours of virtual classroom and 80 hours of on-the-job training), and Online Staff Certification (5 hours online and 25 hours on-the-job). Additional immersion training (2-4 days) may be required for inexperienced extended-stay hotel operators or those not using a management company. After opening, franchisees receive ongoing Franchise Services Support from the Extended Stay Brands Team, which helps with identifying prospective accounts, developing promotional materials, considering advertising opportunities, scheduling AAA inspections, participating in Choice marketing programs, and creating sales action plans. Quality Assurance programs involve periodic visits and guest satisfaction surveys, with feedback provided for compliance; non-compliance can lead to penalties, reservation suspension, or even termination. Marketing and Reservation services are funded by a monthly fee and include an advance reservation system, national, international, and regional advertising, promotional programs, and website maintenance. Franchisees can participate in an optional marketing cooperative and must obtain approval for local marketing materials. The brand also provides access to a Franchise Advisory Council. Technology support includes a mandatory Property Management System (choiceADVANTAGE®) with ongoing 24/7 remote support, software enhancements/updates, online training, and requirements for hardware refresh every 48 months and EMV hardware/software. An annual $1,500 fee is charged for the Educational Resources Program, offering unlimited access to online training. Optional training programs and regional workshops are available throughout the year.
Initial Training Hours
120
Training Location
North Bethesda, Maryland or Scottsdale, Arizona
Ongoing Support
After opening, WoodSpring Suites franchisees receive ongoing Franchise Services Support from the Extended Stay Brands Team, which helps with identifying prospective accounts, developing promotional materials, considering advertising opportunities, scheduling AAA inspections, participating in Choice marketing programs, and creating sales action plans. Additional consultation is available upon request for a fee. Quality Assurance programs involve periodic visits and guest satisfaction surveys, with feedback provided for compliance; non-compliance can lead to penalties, reservation suspension, or even termination. Marketing and Reservation services are funded by a monthly fee and include an advance reservation system, national, international, and regional advertising, promotional programs, and website maintenance. Franchisees can participate in an optional marketing cooperative and must obtain approval for local marketing materials and adhere to website guidelines. The brand also provides access to a Franchise Advisory Council. Technology support includes a mandatory Property Management System (choiceADVANTAGE®) with ongoing 24/7 remote support, software enhancements/updates, online training, and requirements for hardware refresh every 48 months and EMV hardware/software. An annual $1,500 fee is charged for the Educational Resources Program, offering unlimited access to online training. Optional training programs and regional workshops are available throughout the year.
Franchise Requirements
Ideal Candidate Profile
WoodSpring Suites seeks franchisees who meet standard qualifications, including a credit review, and are majority owners actively engaged in the deal process. The brand encourages entrepreneurs from diverse backgrounds and veterans. Candidates are expected to have prior extended-stay hotel experience or be prepared to contract with a recognized hotel management company that possesses such credentials. Franchisees are also required to attend specific training programs.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Non-Exclusive
Staffing Notes
WoodSpring Suites requires franchisees to employ a full-time General Manager who is exclusive to the hotel. This General Manager must be hired at least four months before the hotel's opening and be continuously staffed thereafter. All hotel staff must complete online certification training through Choice University within 90 days of their hire date. WoodSpring Suites strongly recommends hiring a dedicated salesperson, such as a hotel Director of Sales or Sales Manager, whose primary role is to solicit extended-stay business for the hotel. While the franchisor provides training and guidance, franchisees are solely responsible for all employment decisions, actions, and ensuring adequate training for their employees. Choice Hotels International, Inc. may also require franchisees to contract with a recognized hotel management company with extended-stay credentials.