Verified — real FDD extraction
SBA-eligible · directory code S0566 since 2017
ECONO LODGE
Other · independent · est. —
Econo Lodge is an economy hotel brand franchised by Choice Hotels, offering budget rooms and simple amenities. A franchisee owns and operates a limited-service hotel, often a conversion of an existing property, serving price-sensitive road travelers.
ECONO LODGE net unit count declined -11.5% 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: the system is shrinking.
Exit rate · latest year
10.1%
fiscal 2025, per Item 20
Cost to open
$195K–$1.1M
Item 7 total investment range
SBA loan defaults
No loan record
no SBA 7(a)/504 loans found for this brand
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, 65 of 643 franchised outlets left the system — a 10.1% 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 | 702 | 677 | 643 |
| Opened | 29 | 21 | 21 |
| Transfers | 45 | 25 | 24 |
| Terminations | 4 | 4 | 9 |
| Non-renewals | 6 | 7 | 7 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 44 | 44 | 49 |
| Outlets at end | 677 | 643 | 599 |
| Net change | -25 | -34 | -44 |
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $35K franchise fee (Item 5) and a total investment of $195K–$1.1M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$195K–$1.1M
all-in investment range
Franchise fee (Item 5)
$35K
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 ECONO LODGE with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 217 wage cases against operators of this system, recovering $951K in back wages for 821 workers, including 3 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
217
Back wages owed
$951K
Employees affected
821
Since 2020
8
3 of these cases involved child-labor violations, covering 7 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual ECONO LODGE franchisees — separately owned businesses operating under the brand name — not ECONO LODGE 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 ECONO LODGE. 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 ECONO LODGE's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →ECONO LODGE franchise questions, answered from the filings
What percentage of ECONO LODGE franchises closed last year?
In ECONO LODGE's latest FDD Item 20 (fiscal 2025), 65 of 643 franchised outlets left the system — an annualized exit rate of 10.1%. 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 ECONO LODGE franchise cost?
Per ECONO LODGE's 2026 FDD, buying in requires an initial franchise fee of $35K (Item 5) and a total initial investment of $195K–$1.1M (Item 7).
What royalty does ECONO LODGE charge?
ECONO LODGE charges an ongoing royalty of 5.0% of gross sales, per Item 6 of its 2026 FDD.
Does ECONO LODGE disclose earnings (Item 19)?
Yes — ECONO LODGE makes a financial performance representation in Item 19 of its 2026 FDD. Read it closely: franchisors choose which units and which metrics to include.