Choice Hotels

Choice Hotels International stands as one of the largest and most diversified hotel franchise companies in the world, operating a portfolio of more than 7,500 hotels representing approximately 654,000 rooms across 46 countries and territories. Traded on the New York Stock Exchange under ticker symbol CHH, Choice Hotels has built its success over more than eight decades through a pure-play franchise model that enables independent hotel owners to leverage the brand recognition, technology platforms, and loyalty programs of a global hospitality company while maintaining ownership and operational control of their properties. Founded in 1939 as Quality Courts United — a cooperative of seven motel owners seeking to establish quality standards in the then-nascent roadside lodging industry — the company has evolved into a multi-brand powerhouse headquartered in Rockville, Maryland. Choice Hotels' brand portfolio spans the full spectrum of the lodging industry, from economy and midscale properties under the Econo Lodge, Rodeway Inn, and Quality Inn brands, through the core midscale segment with Comfort Inn and Comfort Suites, to upscale offerings with Cambria Hotels and the soft-branded Ascend Hotel Collection. The company's aggressive expansion into the extended-stay segment through WoodSpring Suites, MainStay Suites, and Suburban Studios has positioned it at the forefront of one of hospitality's fastest-growing categories. With 2024 representing a record year for the company — adjusted EBITDA reaching $604 million and net income growing 16 percent to $300 million — Choice Hotels offers franchise investors access to a proven, asset-light business model backed by one of the strongest operating platforms in the hospitality industry.

The hotel industry represents one of the largest and most resilient segments of the global economy, generating hundreds of billions of dollars in annual revenue in the United States alone. Several structural trends favor continued growth in lodging demand: the sustained expansion of domestic leisure travel, the recovery and evolution of business travel patterns following the pandemic, the growing economic importance of bleisure travel that combines work and leisure, and the continued development of secondary and tertiary markets that have historically been underserved by branded hotel supply. Choice Hotels operates primarily in the midscale, upper midscale, and extended-stay segments — categories that have demonstrated particular resilience during economic downturns because they serve value-conscious travelers whose demand persists even when discretionary spending contracts. The competitive landscape in hotel franchising includes Marriott International, Hilton Worldwide, IHG Hotels, Wyndham Hotels, and Best Western, but Choice Hotels differentiates through several strategic advantages: the broadest coverage in the midscale segment where most independent hotels operate, a conversion-friendly model that enables existing hotel owners to rebrand without costly ground-up construction, and an increasingly dominant position in extended-stay lodging where supply constraints and strong demand create favorable economics for franchisees. The company's domestic RevPAR outperformed the broader industry in 2024, growing 4.5 percent in the fourth quarter while exceeding chain-scale benchmarks by 90 basis points — evidence that Choice's brand investments and technology platforms are translating into measurable revenue advantages for franchise owners.

The investment required to franchise a Choice Hotels property varies dramatically based on brand selection, property type, and whether the franchisee is converting an existing hotel or constructing a new build. For conversion projects — where an existing independent or competing-brand hotel is rebranded under a Choice flag — the total investment for an 80-room Comfort Inn or Quality Inn property typically ranges from approximately $780,000 to $3.1 million, covering the franchise affiliation fee, property improvement plan costs, signage, technology upgrades, and working capital. New construction projects require significantly more capital, with 80-room prototype builds ranging from $9.5 million to $14.3 million depending on market, land costs, and brand specifications. Across the full portfolio of brands — from economy Econo Lodge conversions to upscale Cambria Hotels new builds — the total investment range spans approximately $119,000 to over $26 million, providing entry points for a wide range of investor profiles. The initial franchise fee is structured at $500 per room for new franchise agreements with a $50,000 minimum, while transfers and renewals are priced at $750 per room with a $65,000 minimum. Ongoing fees include a royalty rate that averaged 5.06 percent of gross room revenue across the domestic system in 2024, plus marketing and reservation system fees of approximately 4 percent. Franchise agreements typically carry a 20-year term, providing long-term brand protection and allowing franchisees to amortize their property improvement investments over a meaningful time horizon. The conversion model is particularly appealing — it allows hotel owners to begin generating branded revenue within months rather than the two to three years required for new construction, making the return on investment timeline significantly shorter.

Choice Hotels provides comprehensive operational support across every dimension of hotel management, making its franchise system accessible to both experienced hoteliers and investors entering the hospitality industry for the first time. The company's property management technology platform, choiceADVANTAGE, provides integrated tools for revenue management, rate optimization, distribution channel management, and guest communications. Choice's central reservation system connects franchise properties to the company's global distribution network, online travel agencies, and the choicehotels.com direct booking platform — a critical advantage given that direct bookings carry significantly lower distribution costs than third-party OTA channels. The Choice Privileges loyalty program, with over 68 million members, drives meaningful repeat business to franchise properties and provides a customer acquisition channel that independent hotels cannot replicate. Training programs cover property operations, revenue management, guest service standards, and compliance with brand quality requirements, delivered through a combination of in-person workshops, online learning modules, and dedicated field support from Choice's franchise services team. The company also provides pre-opening support for new construction projects, including site selection guidance, architectural and design resources, construction oversight, and project management assistance. For conversion properties, Choice conducts detailed property assessments and develops property improvement plans that maximize the return on renovation investment while ensuring the property meets brand standards. Marketing support extends beyond the national advertising campaigns and digital marketing programs to include localized marketing tools, social media resources, and partnership programs with major travel platforms.

Financial performance across the Choice Hotels system provides meaningful context for prospective franchise investors evaluating the brand's revenue-generating potential. While Choice Hotels does not publish individual property revenue figures in a traditional Item 19 financial performance representation, the company's publicly reported system-wide metrics offer valuable benchmarks. The domestic system achieved an average daily rate of approximately $97 and occupancy levels of roughly 58 percent in 2024, translating to system-wide revenue per available room (RevPAR) that outperformed industry averages across the company's competitive chain scales. The extended-stay segment — led by WoodSpring Suites — has been a particular standout, achieving RevPAR growth of 5.9 percent in the fourth quarter of 2024 and demonstrating the strong demand dynamics that are attracting significant franchise investor interest to this category. Extended-stay properties benefit from longer average lengths of stay, lower operating costs per occupied room, and more predictable revenue streams compared to traditional transient hotels, making them attractive investments for operators seeking stable cash flows. The company's record 2024 financial performance — $604 million in adjusted EBITDA and $300 million in net income — reflects the health and profitability of the overall franchise system, as Choice Hotels' revenue is derived primarily from franchise fees and royalties paid by successful property owners. SBA lending data for Choice Hotels franchise properties shows consistent loan origination activity, indicating that lenders view the brand as a financeable investment with acceptable risk characteristics. The diversity of Choice's brand portfolio also allows franchisees to match their investment to their market — an Econo Lodge conversion in a secondary market requires fundamentally different capital than a Cambria Hotels new build in an urban center, but both benefit from the same loyalty program, technology platform, and brand infrastructure.

Choice Hotels' growth trajectory is accelerating across multiple dimensions simultaneously, creating compelling opportunities for franchise investors in 2025 and beyond. The company opened 407 hotels globally in 2024 — a 21 percent increase over the prior year — while maintaining a development pipeline exceeding 97,000 rooms, with 98 percent concentrated in the upscale, extended-stay, and midscale segments that represent the company's strategic growth priorities. The extended-stay portfolio has been the primary growth engine, with net rooms growing nearly 12 percent year-over-year and a record number of hotel openings in 2025. Choice's acquisition of the Radisson Hotels Americas portfolio in 2022 added the Radisson, Country Inn and Suites, Radisson Blu, and Park Inn brands to the system, significantly expanding the company's presence in the upper midscale and upscale segments. The 2024 strategic partnership with Westgate Resorts added 21 properties and over 14,000 rooms, further expanding the system's upscale footprint and enhancing the Choice Privileges loyalty program's value proposition for members seeking premium accommodations. International expansion is another major growth vector, with franchise agreements awarded outside the United States more than doubling in 2025 compared to the prior year. The company's commitment to shareholder returns — $382 million in stock repurchases and $56 million in dividends in 2024 alone — signals management confidence in the sustainability and cash-generation capacity of the franchise model. For prospective franchisees, these growth investments translate into an expanding loyalty program driving more bookings, an improving technology platform enhancing revenue management capabilities, and an increasingly recognized brand portfolio attracting travelers across every price point and trip purpose.

The ideal Choice Hotels franchise investor brings a combination of real estate investment expertise, hospitality management capability, and sufficient capital to execute either a conversion or new-build project in a market with strong lodging demand fundamentals. Choice actively recruits both experienced hoteliers looking to convert independent or competing-brand properties to a Choice flag, and real estate investors seeking their first entry into the hospitality sector through the company's comprehensive support infrastructure. Multi-unit ownership is common and encouraged — many of Choice's most successful franchisees operate portfolios of 5 to 20 or more properties across multiple brands, leveraging operational scale and market diversification to optimize returns. Territory opportunities exist across all 50 states, with particular demand for extended-stay development in markets experiencing employment growth, new construction in underserved suburban and exurban markets, and conversion opportunities where independent hotels or properties from less competitive brands can benefit from rebranding to a Choice flag. Financial requirements scale with the brand and project type, from relatively modest conversion investments under $1 million to significant new-build projects requiring $10 million or more in total capital. The 20-year franchise term provides the operational runway to execute long-term investment strategies, and Choice's development team works closely with franchisees to identify optimal sites, brands, and project structures for each market opportunity.

Choice Hotels International represents a compelling franchise investment opportunity for entrepreneurs and investors seeking exposure to one of the economy's most essential and resilient sectors. The company's multi-brand portfolio provides entry points at virtually every investment level, from economy conversions requiring modest capital to upscale new-build projects that can generate significant revenue and long-term asset appreciation. The pure-play franchise model means that Choice's corporate success is directly tied to franchisee success — the company profits when its hotel owners generate more revenue, creating an alignment of interests that drives continuous investment in the technology, loyalty, and marketing platforms that support property-level performance. With record financial results in 2024, an accelerating development pipeline, an expanding extended-stay portfolio capturing one of hospitality's strongest growth trends, and a loyalty program exceeding 68 million members, Choice Hotels offers franchise investors a platform for building substantial hotel portfolios backed by a global brand with 85 years of operating history. For qualified investors ready to explore hotel franchise ownership — whether through conversion of an existing property or ground-up development in an underserved market — a consultation with a franchise financing specialist can help evaluate the optimal brand selection, investment structure, and market strategy to maximize returns within the Choice Hotels system.