Red Roof Inn

Red Roof Inn is an economy hotel franchise brand founded in 1973 by James R. Trueman in Grove City, Ohio. Its multi brand portfolio includes Red Roof Inn, Red Roof PLUS+, HomeTowne Studios by Red Roof, and The Red Collection, with more than 700 properties. The system has approximately 606 domestic locations, including 561 franchised and 45 company operated properties. The brand serves economy hotel investors through several brand tiers and reports high franchisee satisfaction in the hospitality industry.

James R. Trueman was a Cleveland native and real estate developer who had developed apartments, office buildings, and mobile home parks. As an automobile racing team owner, his travel exposed a need for clean, inexpensive lodging for business travelers and families. He opened the first Red Roof Inn in Grove City, a suburb of Columbus, Ohio, on February 20, 1973, with a single room rate of $8.50 per night. The name came from the Red Roof Tavern, a steakhouse in Kalamazoo, Michigan. Trueman initially kept the properties company operated and grew the system to more than 100 units within a decade. Eleven days before his death, he saw Bobby Rahal win the 1986 Indianapolis 500 driving the TrueSports Red Roof Inn car.

Morgan Stanley Real Estate Fund purchased Red Roof for approximately $600 million in 1994 and took the company public in 1995 through a $160 million IPO on the New York Stock Exchange. Under Morgan Stanley, Red Roof introduced franchising after 23 years, and the first franchise property opened in 1997 in Branson, Missouri. Accor SA acquired the company in July 1999 for $1.115 billion. Accor sold it in April 2007 for $1.32 billion to a group led by Citigroup Global Special Situations Group and Westbridge Hospitality Fund, a partnership between Westmont Hospitality Group and Canadian pension fund managers. Westmont later became the principal owner. In 2020, the remaining company managed properties moved to RRI West Management as the largest franchisee. Red Roof Franchising is headquartered in Columbus, Ohio, and President Zack Gharib leads its franchise growth and brand standards.

The system has four brand tiers. Red Roof PLUS+, introduced in 2014 as the industry's first trademarked Upscale Economy tier, offers upgraded bath towels, premium bedding, Seattle's Best in room coffee, complimentary snack boxes, and smoke free rooms. HomeTowne Studios by Red Roof, launched in August 2018, serves the economy extended stay segment with kitchenettes, full size refrigerators, microwaves, kitchen tables, weekly housekeeping, 24 hour laundry rooms, and complimentary lobby coffee across more than 60 locations in 24 states. The Red Collection is a midscale soft brand of unique, locally focused hotels in urban destinations. Dual branded properties can combine Red Roof Inn with HomeTowne Studios to serve transient and extended stay demand.

Costs vary by format and development approach. Conversion opportunities start at approximately $259,000 for Red Roof Inn and $713,000 for Red Roof PLUS+. New construction for the Red Roof Inn prototype, an 80 room, three to four story interior corridor property, ranges from approximately $5.9 million to $7.3 million. Per key development costs are $84,000 to $105,000, excluding land. Dual branded Red Roof Inn and HomeTowne Studios properties range from $693,268 for conversions to $14.6 million for new builds. The initial franchise fee is $30,000, with a $3,000 application fee. Agreements run for 10 years with 10 year renewal options.

Red Roof competes in an economy hotel market where Wyndham brands including Super 8, Days Inn, and Microtel collectively control nearly 40 percent of economy hotel rooms. Red Roof operates independently with approximately 6 percent market share. Its pets stay free policy welcomes the first pet up to 80 pounds, supporting demand from travelers with pets. USA Today named the brand the number one budget hotel brand in its 2025 Readers' Choice awards, and Red Roof consistently ranks among the top one or two economy brands in guest satisfaction surveys. Other features include parking at most locations, the RediRewards loyalty program, which has the lowest systemwide points requirement in the industry for free nights, and the Hassle Free Guarantee, under which guests will not pay if a concern cannot be resolved before departure.

Under President Zack Gharib, Red Roof replaced its technology system through a 2022 decision to outsource the full technology stack to HotelKey. The cloud based platform combines property management, booking channels, revenue management, loyalty, point of sale, housekeeping and maintenance tracking, and timekeeping through desktop, tablet, and mobile access. The rollout across all 700 plus properties was completed by 2024, replacing RediStay. Other technology relationships include Morse Technologies for verified Wi Fi speed testing, Sertifi for PCI compliant credit card processing, Zeta Analytics for insights on 225 million American consumers, and AMBER Alerts integration with the property management system. The mobile app covers 670 plus locations and supports same day bookings, app check out, RediRewards management, and direct front desk contact.

Red Advantage gives new franchise owners one on one virtual meetings and on demand training based on their experience and property needs. RED Academy provides brand specific operational training through its learning management system. Regional training managers support every conversion and new opening with an average of four days of on site training plus post conversion assistance. Monthly webinars cover subjects including revenue management and hurricane preparedness. The Franchise Advisory Council represents franchisees to corporate leadership. Operational support includes purchasing programs for supplies, furniture, fixtures, and equipment, along with revenue management guidance, central reservation access, mobile website optimization, and distribution management across major online travel agencies.

Red Roof opened 50 new properties in 2023, representing 60 percent year over year growth. In 2024, the brand marked its 700th hotel with a Red Roof PLUS+ opening in Jamaica, New York, and reported approximately 35 hotels in its active conversion and new build pipeline. The 2024 prototype has an 80 room scalable design for different markets and sites, with development costs below those of midscale competitors. International properties operate in Japan and Brazil, while Canada expansion is planned through FANS International Hospitality Group. Dual branded properties pairing Red Roof Inn or PLUS+ with HomeTowne Studios are part of the growth plan. Red Roof reports that 98 percent of current franchisees would recommend the franchise and that over 92 percent are satisfied with their partnership.

PeerSense data places Red Roof Inn at 68 on the PeerSense Franchise Performance Index, in the Strong tier, based on SBA lending activity and default rates across the system's SBA loan history. Economy hotels have historically been active in SBA lending because their investment requirements and cash flow characteristics fit SBA loan programs. Buyers considering conversions or new construction can evaluate SBA 7(a) loans for general franchise financing and SBA 504 loans for real estate acquisition.