Verified — real FDD extraction
SBA-eligible · directory code S1444 since 2017
RODEWAY INN
Other · independent · est. —
Rodeway Inn is an economy lodging brand franchised by Choice Hotels, positioned for budget travelers seeking basic rooms at low rates. A franchisee owns or converts a small motel or hotel property and operates it under the brand's reservation system and standards, serving cost-conscious road travelers.
RODEWAY INN net unit count declined -8.5% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The main concern in the record: too many owners are failing outright rather than selling.
Exit rate · latest year
11.2%
fiscal 2025, per Item 20
Cost to open
$109K–$702K
Item 7 total investment range
SBA loan defaults
4.4%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 50 of 447 franchised outlets left the system — a 11.2% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 503 | 472 | 447 |
| Opened | 35 | 31 | 35 |
| Transfers | 17 | 16 | 15 |
| Terminations | 4 | 7 | 6 |
| Non-renewals | 10 | 8 | 2 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 52 | 41 | 42 |
| Outlets at end | 472 | 447 | 432 |
| Net change | -31 | -25 | -15 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 348 SBA-backed loans to RODEWAY INN franchisees since 1991. Of the 183 that have resolved, 4.4% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
4.4%
8 of 183 resolved defaulted
56.1%
avg. charged-off $ ÷ approved $
2.5%
default rate × loss severity
$2,106,916
what recent franchisees borrowed
96 mo
approval → charge-off, defaulted loans
33 vs 51
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO RODEWAY INN BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
Gbank
9.2% of this brand's loans
That lender charges off 1.9% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
80.6%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
−1.7pp
multi-unit vs single-unit owners
Owners of multiple units default at 3.4%; single-unit owners at 5.1%.
Computed from 348 SBA 7(a)/504 loans to RODEWAY INN franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $25K franchise fee (Item 5) and a total investment of $109K–$702K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$109K–$702K
all-in investment range
Franchise fee (Item 5)
$25K
upfront, one-time
Royalty (Item 6)
5%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$50K
5% of sales, before profit
Over a 10-yr term
$500K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for RODEWAY INN with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 142 wage cases against operators of this system, recovering $886K in back wages for 783 workers, including 4 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
142
Back wages owed
$886K
Employees affected
783
Since 2020
12
4 of these cases involved child-labor violations, covering 6 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual RODEWAY INN franchisees — separately owned businesses operating under the brand name — not RODEWAY INN itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2025.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for RODEWAY INN. That's a good sign — but it reflects news coverage, not a guarantee.
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing RODEWAY INN's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →RODEWAY INN franchise questions, answered from the filings
What percentage of RODEWAY INN franchises closed last year?
In RODEWAY INN's latest FDD Item 20 (fiscal 2025), 50 of 447 franchised outlets left the system — an annualized exit rate of 11.2%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a RODEWAY INN franchise cost?
Per RODEWAY INN's 2026 FDD, buying in requires an initial franchise fee of $25K (Item 5) and a total initial investment of $109K–$702K (Item 7).
What royalty does RODEWAY INN charge?
RODEWAY INN charges an ongoing royalty of 5.0% of gross sales, per Item 6 of its 2026 FDD.
Does RODEWAY INN disclose earnings (Item 19)?
Yes — RODEWAY INN makes a financial performance representation in Item 19 of its 2026 FDD. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for RODEWAY INN franchises default?
Across 348 SBA-backed loans to RODEWAY INN franchisees since 1991, 8 of the 183 that have resolved were charged off — a 4.4% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.