Start a Choice Hotels Franchise in 2024

Franchise 500 Rank: N/R Not ranked last year

Initial investment: $119K - $26.4M

Units as of 2021: 7,151

Choice Hotels started with a small hotel chain in 1939. The company tried to launch innovations to keep itself ahead of the game. These innovations included being one of the first to offer 24-hour, toll-free reservations in 1970, using a global marketing and reservations system in 1983, implementing non-smoking rooms in 1984, and utilizing voice-enabled hotel bookings on the Google mobile app in 2019.

Choice Hotels has over 7,000 hotels worldwide. Over 5,500 of those franchises are located in the United States. The franchise works to offer guests a clean, comfortable stay that is memorable for all the right reasons.

Why You May Want To Start a Choice Hotels Franchise

Having the right franchisee for Choice Hotels can drastically affect how the franchise functions. If the franchise doesn’t perform well and the franchisee doesn’t care enough to fix things, guests will notice, which can negatively affect their experience.

Franchisees for Choice Hotels may need to have a few key characteristics. The first is good time management skills; this may be especially true if you operate and manage more than one location. The second characteristic is good leadership skills. Operating a hotel typically requires a relatively large amount of staff. The staff needs to operate like a well-oiled machine, so if the franchisee does not have good leadership skills, the franchise could suffer. The third characteristic is a willingness to learn. Choice Hotels keeps on top of industry innovations, and the company tries to be among the first to implement them within their franchises. If a franchisee is not open to learning new things, the franchise could keep from staying in front of the competition.

What Might Make a Choice Hotels Franchise a Good Choice?

Something that may set Choice Hotels apart from other hotel franchises is the different brands franchisees can choose from. Various choices may allow franchisees to pick what will work best in their area. It also may allow franchisees to have more than one revenue stream if they open more than one location or brand.

To be part of the Choice Hotels team, you should make sure you're financially ready for an initial investment made up of a franchise fee and other startup costs. In addition, you should prepare yourself for ongoing fees that will include advertising fees and royalty fees. Franchisees will also need to meet the company's set net worth and liquid capital requirements.

How To Open a Choice Hotels Franchise

As you decide if opening a Choice Hotels franchise is the right move for you, make sure you take time to explore the opportunity. Research the brand and your local area to see if a Choice Hotels franchise would do well in your community. While competition is healthy, too much of it may not allow for the most possible growth.

Choice Hotels offers franchisees training and support before opening a franchise in addition to ongoing training and support after opening. As you research Choice Hotels, make sure you write down questions to ask the team during training.

Company Overview

About Choice Hotels

Industry	Lodging
Related Categories	Hotels & Motels
Founded	1939
Parent Company	Choice Hotels Int'l.
Leadership	Patrick Pacious, President/CEO
Corporate Address	1 Choice Hotels Cir., #400 Rockville, MD 20850
Social	Facebook, Twitter, LinkedIn, Instagram

Business Overview

Franchising Since	1972 (52 years)
# of employees at HQ	1,345
# of Units	7,151 (as of 2021)

Information for Franchisees

Here's what you need to know if you're interested in opening a Choice Hotels franchise.

Financial Requirements & Ongoing Fees

Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.

Initial Franchise Fee Definition: The initial fee paid to a franchisor to join their system What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.	$15,000 - $60,000
Initial Investment Definition: The total amount necessary to begin operation of the franchise What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.	$118,825 - $26,370,195
Net Worth Requirement Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.	$1,000,000 - $10,000,000
Cash Requirement Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.	$1,000,000
Veteran Incentives Definition: A discount or other incentive offered to military veterans who buy a franchise with this company.	$50,000 to $200,000
Royalty Fee Definition: A ongoing fee paid to the franchisor on a regular basis. What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.	5-6%
Ad Royalty Fee Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts. What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.	2.5-3.5%
Term of Agreement Definition: The length of time your franchise agreement will last. What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.	20 years
Is franchise term renewable?	Yes

Financing Options

Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.

Third Party Financing	Choice Hotels has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory

Training & Support Offered

Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.

On-The-Job Training	50+ hours
Classroom Training	132 hours
Ongoing Support	Purchasing Co-ops Newsletter Meetings & Conventions Grand Opening Online Support Security & Safety Procedures Field Operations Site Selection Proprietary Software Franchisee Intranet Platform
Marketing Support	Co-op Advertising Ad Templates National Media Regional Advertising Social Media SEO Website Development Email Marketing Loyalty Program/App

Operations

Additional details about running this franchise.

Is absentee ownership allowed?	Yes
Can this franchise be run from home/mobile unit? Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.	No
Can this franchise be run part time? Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.	No
Are exclusive territories available? Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened. What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.	Yes