About HomeTowne Studios Franchise
Franchisees own and operate economy extended stay or transient lodging facilities under the HomeTowne Studios by Red Roof, HomeTowne Studios & Suites by Red Roof, HomeTowne Inn, or HomeTown Inn brand.
Hotels offer hotel rooms and amenities for extended stay, temporary housing or transient visits with kitchenettes.
HomeTowne Studios Franchise Cost & Fees
Minimum Investment
$420K
Average Investment
$7.6M
Maximum Investment
$14.8M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $30,000 (up to 100 rooms) + $300/additional room | One-time payment upon signing |
| Royalty Fee | 5.5% of Gross Room Revenues of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 3% of Gross Room Revenues (Marketing and Reservation Fee, subject to increase to 5%) | National brand fund |
| Total Investment Range | $420,000 – $14,843,155 | Includes build-out, inventory, working capital |
The investment range of $420K–$14.8M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5.5% of Gross Room Revenues) and marketing fee (3% of Gross Room Revenues (Marketing and Reservation Fee, subject to increase to 5%)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Application Fee/Initial Franchise Fee (100 rooms) | $35,000 | $35,000 |
| Opening Package | $2,500 | $2,500 |
| Market Study (optional) | $0 | $10,000 |
| Phase I Environmental Survey (optional) | $0 | $8,000 |
| Design, Testing & Fees | $135,000 | $225,000 |
| Site and Civil Work | $250,000 | $500,000 |
| Landscaping and Irrigation | $0 | $84,000 |
| Facility Construction/Renovation | $0 | $11,749,516 |
| Construction Contingency | $0 | $250,000 |
| Owner Project Management | $0 | $120,000 |
| Furniture, Fixtures, Equipment and Soft Goods | $120,000 | $1,692,000 |
| Signage | $5,000 | $120,000 |
| Opening Inventory and Supplies | $5,000 | $55,844 |
| Utility Deposits | $0 | $29,000 |
| Guest Wi-Fi System | $0 | $46,153 |
| Voice Telephone System | $0 | $44,307 |
| Reservation Platform/PMS Software License Fee and Computer Systems | $16,500 | $22,000 |
| Insurance | $0 | $73,500 |
| Training Expenses | $5,500 | $9,100 |
| Additional Funds - 3 months | $112,000 | $154,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $15,000 plus $2,500 Transfer Application Fee |
| Renewal Fee | 50% of then-current initial franchise fee |
| Technology Fee | $490/month + $3.85/room/month (Reservation Platform/PMS, Help Desk, Hardware/Software Support) |
| Audit Fee | All costs and expenses of audit if underpayment of 2%+ |
| RediRewards Preferred Member Program | 2% of Gross Room Revenues from RediRewards members (subject to increase to 5%) |
| Distribution/Listing Fees/Commissions/Rebates | 0-25% of applicable net booking |
| Booking Fees | $6.60-$7.00/GDS, $3.30-$3.60/third party internet, $1.99-$2.25/direct connect |
| Mobile App Booking Fee | $1.75/net booking |
| Credit Card Payment Surcharge | 2.8% per transaction |
| Revenue Management Software System | Setup up to $250; 0.3% of Gross Room Revenues ($100-$400/month) |
| Desktop Protection and Maintenance Fee | $200/machine/year |
| Meetings and Conferences | $800-$3,500 plus expenses |
| Liquidated Damages | $100,000 pre-opening; post-opening: greater of $100,000 or avg monthly fees x lesser of 36 months or remaining term |
| De-Identification Fee | $2,500/day if continuing to use IP after termination |
| Digital Marketing | No less than 3% of applicable Gross Room Revenues (subject to increase to 15%) |
| Professional Photography | $750-$2,199 |
| Guest Relations Intervention Fee | $150/escalation |
| On-Site Quality Audit Fee | $2,500-$10,000 |
| Cooperative Contribution | Up to 1% of Gross Room Revenues |
| AH&LA Membership | $3.00/room/year |
| Rooms Addition Fee | $450/additional guest room |
| REDvenue Optimizer Program | $525-$1,195/month |
| RediResponse (reputation management) | $125-$250/month |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | 21.5 hours RED Advantage Training + 16-24 hours Field Training |
| Classroom Training | 21.5 hours (RED Advantage, online/webinar) |
| On-the-Job Training | 16-24 hours classroom + 7-9 hours on-the-job (Field Training at your hotel) |
| Training Location | Online (RED Advantage); Your Hotel (Field Training); New Albany, Ohio (New Owner Orientation) |
| Additional Training | New Owner Orientation mandatory within 6 months ($1,000-$1,600/person). Continuing Education required annually ($900-$1,200/year). On-Site Quality Training ($2,250-$5,000) if quality metrics fall below standards. Conferences ($800-$3,500). |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Exclusive (for HomeTowne Studios brand only) |
| Exclusive Territory | Yes |
| Territory Size | As small as one or two blocks or as large as a small town |
| Description | Exclusive Territory negotiated based on guest rooms, competing hotels, population density, transportation, traffic patterns, and development plans. HTS will not grant another HomeTowne Studios franchise or operate within your Exclusive Territory. However, affiliates RRF and TRC can franchise/operate Red Roof Inn, Red Roof PLUS+, Red Roof Inn & Suites, The Red Collection, and other brands within your Exclusive Territory. These may offer extended stay lodging competing with you. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 20 years |
| Renewal Term | 10 years |
| Renewal Fee | 50% of then-current initial franchise fee |
| Renewal Conditions | Not in default, paid all monetary obligations, submit renewal application, complete certain training and upgrading, execute general release, pay renewal fee, execute then-current franchise agreement (may contain materially different terms) |
| Transfer Fee | $15,000 plus $2,500 Transfer Application Fee |
| Transfer Conditions | Payment of all money owed, non-default, transferee has proper qualifications, sign then-current Franchise Agreement, payment of Transfer Application Fee and Transfer Fee, sign Transfer Addendum, owners execute guarantee, general release, training for transferees manager, conform to current Standards |
| Termination for Cause | Curable: 30 days for law/ordinance violations, failure to upgrade, operational non-compliance, quality measurement failure, non-payment, inspection/quality failures, internet listing violations, indemnification breaches. Non-curable: insolvency/bankruptcy, dissolution, foreclosure, ceases to operate, public health/safety threat, felony conviction, adverse activity impacting Marks/goodwill, unauthorized transfer, disclosure of trade secrets, failure to transfer following owner incompetence, false statements, misuse of Marks, repeated defaults, failure to comply with Renovation/Construction Addendum, opening without authorization, cross-termination with affiliate agreements |
| Non-Compete Period | Not applicable (no post-termination non-compete) |
| Non-Compete Details | No post-termination non-competition covenant. During term: must not divert business away from HomeTowne Studios and Red Roof Inn System hotels. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | Not required to personally supervise. Must have on-premises manager who completed RED Advantage Training, complies with manager specifications. Manager need not have ownership interest but franchisor requires prior approval for third-party managers. Managers must sign confidentiality and non-competition agreements. All owners and spouses must sign Guarantee. |
| Required Suppliers | Must use Reservation Platform/PMS from HTS (sublicensed). Must use designated revenue management software. Must purchase brand-specific signage, marketing materials, uniforms, collateral materials from Designated Suppliers. Must use computer hardware/software supporting PMS from designated suppliers. |
| Supply Restrictions | 80-90% of purchases and leases in development and operation must comply with HTS standards and specifications. 40% of purchases to establish and 35% to operate must be from HTS or Designated Suppliers. |
| Franchisor Revenue from Suppliers | In 2024: HTS received $334,178 from Reservation Platform/PMS (6.11% of $5,469,956 annual revenue) and $62,007 from RediCall (1.13%). Affiliate RRI Reservations earned $1,920,847 from franchisees. HTS did not receive revenue from suppliers based on franchisee purchases. |
HomeTowne Studios Franchise Earnings — Item 19
HomeTowne Studios does not make an Item 19 financial performance representation in their FDD. This means they do not disclose revenue, profit, or earnings data for franchised locations. Before investing, ask the franchisor directly for franchisee contact information so you can speak with existing owners about their actual financial performance.
HomeTowne Studios does not include an Item 19 financial performance representation in their FDD. Contact information for current and former franchisees is listed in Item 20 of the FDD.
HomeTowne Studios Litigation & Risk Flags
1 Pending Action ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
HomeTowne Studios System Growth
Total Units
84
Franchised
45
Company-Owned
39
HomeTowne Studios currently operates 45 franchised locations and 39 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2022 | 13 | 2 | 68 |
| 2023 | 18 | 13 | 73 |
| 2024 | 20 | 9 | 84 |
Transfers: 6 | Closures: 0
State Registrations
Registered in 16 states: CA, CT, HI, IL, IN, MD, MI, MN, NY, ND, OR, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$5.5M
HomeTowne Studios Franchise — FAQ
The total investment to open a HomeTowne Studios franchise ranges from $420,000 to $14,843,155, per their Franchise Disclosure Document. This includes the initial franchise fee of $30,000 (up to 100 rooms) + $300/additional room. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
HomeTowne Studios charges a royalty fee of 5.5% of Gross Room Revenues of gross sales, plus a 3% of Gross Room Revenues (Marketing and Reservation Fee, subject to increase to 5%) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the HomeTowne Studios Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from HomeTowne Studios to ensure you have the most up-to-date version.
HomeTowne Studios does not provide an Item 19 financial performance representation in their FDD, which means they do not disclose franchisee revenue or earnings data. Prospective investors should contact existing franchisees directly (listed in Item 20 of the FDD) to gather real-world financial performance information.
HomeTowne Studios has been franchising since 2018. The FDD shows an investment range of $420,000-$14,843,155, a 5.5% of Gross Room Revenues royalty, and includes an Item 19 earnings disclosure. There are 1 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $30,000 (up to 100 rooms) + $300/additional room and the total investment ranges from $420,000 to $14,843,155 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from HomeTowne Studios and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with HomeTowne Studios or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com