Hotel Franchise Statistics: Ownership, SBA Lending and FDD Terms

Hotel franchise statistics: how franchised U.S. hotels are

Summary. On both Census measures, hotels are among the most franchised businesses in the United States. The 2017 Economic Census, the latest U.S. franchise tabulation, counted 31,244 franchise establishments among 53,978 hotels and motels (NAICS 721110), a franchise share of 57.9% (Census EC1700FRAN). Among 6-digit industries with at least 1,000 establishments, that share ranked 3rd of 247, behind only new car dealers and private mail centers. Across all industries in the same tabulation, 11.5% of establishments were franchises.

The franchise model is a hotels-and-motels phenomenon, not a lodging-wide one. In 2017, bed-and-breakfast inns (NAICS 721191) had a franchise share of 0.9% (25 of 2,925 establishments) and all other traveler accommodation (721199) had 1.2% (17 of 1,418), per the same Census file. Casino hotels (721120) stood at 13.8%.

The firm-level Annual Business Survey (ABS) points the same way with newer data. In data year 2023 (2024 ABS), 41.5% of responding traveler accommodation firms (NAICS 7211) operated all or part of their business as a franchise, standard error 1.7 points (Census ABS). That was the highest share of the 240 4-digit industries with a published value, against 4.7% for all responding employer firms. The 7211 share was 37.9% in 2020 (2021 ABS), 40.1% in 2021 (2022 ABS) and 40.7% in 2022 (2023 ABS); with standard errors of 1.7 to 2.5 points, the year-to-year moves are within sampling noise. For all accommodation (NAICS 721), the share was 35.4% (SE 1.9) in 2019 (2020 ABS) and 35.8% (SE 1.3) in 2023.

Context. The ABS counts firms, the Economic Census counts establishments, so the two percentages measure different things and should not be averaged. The American Hotel & Lodging Association states that 57% of U.S. hotels are franchised (AHLA); its page gives no source or date, but the figure matches the 2017 Census share. Industry research that counts only branded hotels reports a higher franchise share, roughly 80% in 2019 per JLL using STR data (Hotel Online). County Business Patterns counted 55,895 hotel and motel establishments in 2023 (Census County Business Patterns), against 53,978 in the 2017 Economic Census; the two programs differ in coverage and County Business Patterns has no franchise flag.

Who owns franchised hotels: franchisees, not brands

Summary. Most franchised hotels are owned by franchisees, not by the brand. In 2017, 27,898 of the 31,244 franchise hotels and motels, or 89.3%, reported being franchisee-owned, and 3,346 were franchisor-owned (Census EC1700FRAN). Franchisor-owned franchise hotels were 6.2% of all hotel and motel establishments.

The franchisee-owned share was 92.9% in 2012 and 91.5% in 2007 (Census 2012; Census 2007). The count of franchisor-owned establishments rose 101% between 2012 and 2017, roughly doubling, from 1,665 to 3,346. Census changed the franchise question for 2017 to ask whether a location operates under a trademark or brand authorized by a franchisor (Census CES-WP-19-20), so part of that rise may reflect how brand-operated hotels answered rather than new company ownership.

Current company filings. The census split is from 2017; public hotel companies report their systems every year. Hilton reported 6,211 U.S. hotels at December 31, 2025, of which 6,031 were franchised or licensed, 180 managed and none owned or leased, a franchised share of 97.1% of hotels and 90.7% of rooms (Hilton 10-K). Marriott reported that 78.0% of its 9,805 properties worldwide were franchised, licensed or other, with 1,966 managed and 51 owned or leased (Marriott 10-K). Choice Hotels reported a U.S. franchise system of 6,187 hotels at the end of 2025 and said its U.S. operations owned 17 open hotels and managed 13 (Choice Hotels 10-K). In a managed hotel the brand runs operations under a management agreement while a third party usually owns the building, so “run by the brand” and “owned by the brand” are different groups, and the Census asks only about ownership.

Franchise vs independent hotels: size per establishment, 2017

Summary. Franchise hotels were larger than other hotels in 2017 on receipts and staffing, and franchisor-owned franchise hotels were much larger than franchisee-owned ones. Receipts averaged $4.01 million per franchise hotel and motel establishment against $2.61 million per non-franchise establishment, a ratio of 1.54 (Census EC1700FRAN). Franchise establishments averaged 33.3 paid employees against 25.0, and annual payroll of $907,047 against $705,016.

Within the franchise group, franchisor-owned hotels averaged $11.21 million in receipts and 73.5 employees per establishment, against $3.14 million and 28.5 for franchisee-owned hotels, a receipts ratio of 3.6. Payroll per employee was $27,251 at franchise hotels and $28,199 at non-franchise hotels in 2017. Franchise establishments accounted for 67.9% of hotel and motel receipts and 64.7% of paid employees.

Context. Receipts are revenue, not profit, and the Census does not publish rooms, occupancy or margins by franchise status. The size order flipped between censuses: in 2012 receipts averaged $2.21 million vs $3.16 million per franchise vs non-franchise establishment, and in 2007 $2.27 million vs $2.77 million (Census 2012; Census 2007). The franchise share of hotel receipts jumped from 38.3% in 2012 to 67.9% in 2017. A Census Bureau working paper found that recoding responses with external web data and machine learning raised the unweighted count of franchise-affiliated establishments in the 2017 Economic Census by 22% to 42% across covered industries, and that 2007 responses had been manually reviewed while 2012 responses were not (Census CES-WP-19-20), so the 2017 figures are the better measure but are not a clean trend against 2012. The cross-industry comparison of franchise and independent units is in our franchise vs independent business study.

SBA loans to hotel franchises, FY2010 to FY2026

Summary. Hotels take a small share of SBA franchise loans by count and a large share by dollars. From FY2010 to June 30, 2026, lenders coded 8,377 SBA 7(a) loans to hotels and motels with a franchise identifier, worth $21.35 billion: 8.9% of franchise-coded 7(a) loans and 31.7% of franchise-coded 7(a) dollars (SBA FOIA data). In the SBA 504 program, hotels took 29.7% of franchise-coded loans and 52.0% of franchise-coded debenture dollars (3,428 loans).

The median franchise-coded hotel 7(a) loan rose from $1,320,000 in FY2010 to $3,381,500 in FY2026 through June 30, compared with a median of $350,000 for franchise-coded 7(a) loans in all other industries in FY2026. Most hotel loans carry a franchise code: 70.5% of FY2026 hotel 7(a) loans and 83.1% of hotel 7(a) dollars were franchise-coded. Hotels’ share of franchise-coded 7(a) loans was 6.8% in FY2026 to date, with 26.0% of the dollars.

Hotel franchise loans go mostly to existing hotels, not new ones. From FY2020 to June 2026, 36.9% of franchise-coded hotel 7(a) loans were for a change of ownership and 31.1% went to businesses more than 2 years old; 7.7% were startups. For franchise-coded 7(a) loans in all other industries, 57.9% were startups and 13.1% changes of ownership. In the 504 program, 39.7% of franchise-coded hotel loans were startups.

Rules that shape the numbers. The 7(a) maximum is $5 million (SBA), and the FY2026 hotel median of $3,381,500 sits well inside it. SBA treats hotels, motels and other lodging as Limited or Special Purpose Property in the 504 program, so the borrower must contribute at least 15%, or 20% for a new business, against a 10% standard minimum (SBA SOP 50 10 8.1). Hotels are eligible only if more than 50% of revenue comes from guests staying 30 days or less.

Coding gap. The franchise flag is entered by lenders against SBA’s Franchise Directory. While the Directory was suspended, the franchise-coded share of hotel loans fell to 49.8% (October 2023 to February 2025), from 69.8% before (October 2021 to May 10, 2023), and recovered to 67.7% from June 2025. FY2024 and FY2025 hotel franchise counts are therefore understated. The program-wide franchise share and the coding gap are covered in our SBA franchise loans report; this section reports only the hotel slice.

Where SBA hotel franchise loans go, by state

Summary. Hotel franchise lending is concentrated in a handful of states. From FY2020 to June 30, 2026, Texas projects received 654 franchise-coded SBA hotel loans (7(a) plus 504), 13.7% of the U.S. total; Georgia had 343 (7.2%) and California 321 (6.7%) (SBA FOIA data). The five states with the most such loans (Texas, Georgia, California, Ohio and North Carolina) held 38.2% of them.

The map shows a different measure: hotels’ share of each state’s own franchise-coded SBA loans. In South Carolina, hotels were 15.1% of franchise-coded loans; in Florida they were 5.2%. States with few loans swing widely, so the table lists the loan count next to each share.

What hotel franchise FDDs charge and promise

Summary. Hotel franchise disclosure documents (FDDs) differ from other sectors on almost every term that matters to a buyer. The site’s FDD datasets cover 18 lodging FDDs and 241 FDDs from 13 other sectors, issued 2025 to 2026 and registered in Minnesota (Minnesota CARDS). The lodging FDDs were issued between 2025-03-31 and 2026-07-15.

Cost. The median Item 7 initial investment for a new hotel ran from $9,162,958 to $23,895,500, against $222,400 to $497,000 for other sectors. Lodging Item 7 ranges ran from a low of $108,795 for an economy conversion to a high of $168,938,990 for a 300-room full-service new build (table below). The median initial franchise fee was $50,000, close to the $49,500 median elsewhere.

Fees. 16 of 18 lodging FDDs charge royalties on room revenue, a base no other sector in the sample uses. The median percentage royalty was 5.0% of room revenue for lodging and 6.0% of gross sales for other sectors with a percentage royalty, so the rates are not directly comparable. The median brand or marketing fund was 3.0% against 2.0%, and all recurring percentage fees combined came to a median 8.5% against 8.0% (fee dataset). Choice Hotels reported an average U.S. royalty rate of 5.14% in 2025 (Choice Hotels 10-K).

Who runs the hotel. None of the 18 lodging FDDs requires the owner to take part personally in operations under Item 15 (18 of 18), against 43.2% of other FDDs, and none requires an owner to work full time, against 26.1% elsewhere. The FDDs instead set conditions on the general manager or management company. Item 15 rules for all sectors are in our semi-absentee franchises report.

Territory. 14 of 18 lodging FDDs (77.8%) grant no protected area in the standard agreement, against 14.5% of other FDDs (Item 12 dataset). Where hotel brands offer protection, it is often negotiated, short or limited to new same-brand hotels. All 18 print the federal sentence “You will not receive an exclusive territory,” which the FTC Franchise Rule requires when no exclusive territory is granted (16 CFR 436.5). Cross-sector territory data are in our franchise territory rights report.

Transfer, term and exit. The median hotel transfer fee for a full sale was $70,000, against $10,000 in other sectors, and 15 of 18 lodging FDDs set it at or above the initial fee (2.2% elsewhere). The median initial term was 20 years against 10. Half of the lodging FDDs (9 of 18) give no renewal right, against 2.1% of others, and none has a post-term non-compete, against 95.0% of other FDDs, so the agreements in the sample do not bar an owner from running the hotel under another brand after the term. Transfer fees across all sectors are analyzed in our franchise transfer fees report.

Disclosure and system size. 8 of 18 lodging FDDs (44.4%) include an Item 19 financial performance representation, against 79.7% of other FDDs. The lodging sample leans toward new brands: the median system had 14 franchised outlets at year end against 65, and 3 of 18 had none yet.

What a hotel franchise buyer should check

These are points to verify in a hotel FDD and loan file, drawn from the differences above. They are not legal, tax or investment advice; a franchise attorney and lender should review any agreement.

• Item 12 territory. Expect no protected area by default in most hotel FDDs (77.8% of the sample). If the brand offers an area of protection, check its length, radius and exceptions for acquired hotels and other brands.
• Item 6 transfer fee. A median hotel transfer fee of $70,000 affects resale value; check whether the buyer pays a new application or affiliation fee and what upgrades the franchisor requires as a condition of transfer.
• Item 17 term and renewal. Twenty-year terms are typical; half of the sample gives no renewal right, so plan for relicensing at the brand’s terms or a change of flag.
• Item 15 management. Owner participation is not required in any lodging FDD in the sample, but 12 of 18 require franchisor approval of the manager or management company and 16 of 18 require the manager to complete the franchisor’s training.
• Item 7 table choice. Hotel FDDs often show several Item 7 tables (new build vs conversion, room counts); compare the table that matches the project.
• Item 19. Fewer than half of the lodging FDDs in the sample include one; where there is none, the FDD gives no franchisor-provided performance figures, and buyers rely on their own market study.
• Financing. SBA 504 requires at least 15% from the borrower for a hotel project, 20% for a new business (SBA SOP 50 10 8.1); 7(a) loans top out at $5 million.

Broader steps for evaluating any franchise are in our buying a franchise guide, and cost categories are explained in our franchise costs guide.

Where the hotel franchise data stops

• No newer establishment count. The 2017 Economic Census is the latest U.S. franchise-status tabulation. The 2022 Economic Census release schedule lists no U.S. franchise table, only a Puerto Rico table released in December 2024 (Census 2022 release schedule).
• Measurement change in 2017. The 2017 question wording changed, and Census research shows that response review methods (manual in 2007, none in 2012, automated recoding tested on 2017) move franchise counts substantially (Census CES-WP-19-20). Treat 2007 and 2012 as a different measurement, not a baseline.
• Ownership vs operation. The Census splits franchisee-owned from franchisor-owned; it does not separate brand-managed hotels owned by investors. Company 10-K counts fill part of that gap but cover single companies.
• ABS is firms, responding only. ABS franchise shares are percents among responding firms with no nonresponse weighting (ABS methodology); employment and receipts shares for 7211 carry standard errors too large to use. The 2024 ABS is scheduled for December 3, 2026 (Census release calendar).
• SBA coding. Franchise codes depend on lenders and on SBA’s Franchise Directory; FY2024 and FY2025 are undercounted. 504 dollars are the SBA/CDC debenture only, not the full project. Loans are approvals, not performance; no loan outcomes or brand-level results are reported here.
• Small FDD slice. 18 lodging FDDs are a sample registered in Minnesota, chosen with sector quotas from the site’s 259-FDD panel. Several are new brands; the slice describes disclosed terms, not what owners negotiate.
• Estimates from industry bodies. IFA and FRANdata estimate 52,111 lodging franchise establishments in 2025 (IFA and FRANdata), a model-based figure with definitions different from the Census; it is shown for context only.