Loan record only — SBA data verified, FDD not yet in our corpus
SBA-eligible · directory code S1109 since 2017
Microtel
Hotels & Hospitality · independent · est. —
Microtel is an economy hotel brand offering consistent, newly built limited-service properties for budget-conscious travelers. A franchisee is a hotel owner who develops and operates a property under the brand's flag, managing front desk, housekeeping, and facilities within the chain's reservation system.
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
Not enough disclosure
Distress
No verified FDD extraction to judge from. Any figures shown are labelled sample data or independent federal records.
SBA loan defaults
3.3%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
No score available.
Systemwide units
Insufficient trend data.
We hold no Franchise Disclosure Document for Microtel, so this page carries no exit rate, fees, investment range, or Item 19 earnings claim. What it does carry is the federal loan record: every SBA 7(a) and 504 loan made to a Microtel franchisee since 1991 and how each one ended. That is an independent, sourced measure of how the brand's owner-operators actually fared — and for most brands it is the only outcome data that exists publicly.
Brands enter the index this way when they don't register in the states we crawl. We add the filing when we obtain it — see methodology for how coverage is built and what each evidence level means.
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 94 SBA-backed loans to Microtel franchisees since 2007. Of the 30 that have resolved, 3.3% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
3.3%
1 of 30 resolved defaulted
55.1%
avg. charged-off $ ÷ approved $
1.8%
default rate × loss severity
$2,369,119
what recent franchisees borrowed
185 mo
approval → charge-off, defaulted loans
29 vs 15
distinct banks still lending
Charge-off rate by loan approval year (%)
Loan performance by state
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO MICROTEL BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
Gbank
16.1% 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
81.4%
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?
Not enough resolved loans to split
Computed from 94 SBA 7(a)/504 loans to Microtel 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.
Labor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 80 wage cases against operators of this system, recovering $299K in back wages for 431 workers, including 2 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
80
Back wages owed
$299K
Employees affected
431
Since 2020
3
2 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 Microtel franchisees — separately owned businesses operating under the brand name — not Microtel 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 Microtel. 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 Microtel's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →