The 2026 Hotel Franchise Fee Guide

The number that matters is not the royalty

Ask what a brand costs and you will be told a royalty: five percent, six percent. That number is real and it is not the answer. Of the 147 brands in this edition, 119 charge a separate mandatory program, marketing or reservation fee on the same gross rooms revenue as the royalty. Both are compulsory, both are assessed on the same base, and only their sum is comparable across brands.

We call that sum the rooms-base total. It is the only figure in this paper that can be laid side by side across franchisors, because it is the only one where every component is a percentage of the same thing.

The spread is the finding. Forty brands sit at or above 9.0% of rooms revenue; eighteen sit at or below 7.0%. On a hotel doing $4m in rooms revenue that gap is roughly $80,000 a year before a single other line of the operating statement moves — and it is a gap between brands that are otherwise pitched as competing for the same site.

Royalties cluster. Everything else does not

The royalty is the most standardised number in the industry. Of 136 brands that disclose a percentage royalty, more than half charge exactly 5.0%.

The program fee is where brands differentiate, and it is the number nobody quotes. Across the 119 brands that charge one, it runs from 1.57% to 4.00% of gross rooms revenue, median 3.00%. A 2.4-point spread on a fee most operators treat as a rounding difference is, in practice, half the royalty again.

Four structures that break a simple comparison

Roughly one brand in five is not priced the way the summary tables assume. These are not edge cases to be dismissed; they are where the comparison quietly goes wrong.

Flat per-room fees

Twelve brands charge no percentage of rooms revenue at all. Cobblestone's brands are billed at a dollar amount per guestroom per day; several economy brands under other franchisors do the same. At a low ADR these convert to a very high effective percentage and at a high ADR to a very low one, so quoting them as “equivalent to X%” without an ADR assumption is meaningless. We report them as flat, with no percentage.

Bundled fees

Sixteen brands roll royalty, marketing and in some cases loyalty into a single line. A bundled 9% and an unbundled 5% + 4% are not the same product even where the arithmetic matches, because the bundled brand carries no separate loyalty assessment to add later.

Elections

At least one brand lets the franchisee choose its fee basis outright — a fixed dollar amount per room per day or a percentage of gross rooms revenue, decided at signing. There is no single correct number to publish for a brand like that, and any table that shows one has picked for you without saying so.

Split mandatory fees

One franchisor in this edition splits its mandatory charge into a program fee and a separately named reservation fee, both percentages of gross rooms revenue, both compulsory. Read the royalty and the program fee only and the brand looks a point cheaper than it is.

Loyalty is not additive, and adding it is the common error

Sixty-two brands disclose a loyalty or frequent-traveller charge, running from 1.0% to 5.0% with a median of 4.0%. It is tempting to add that to the rooms-base total. Doing so is wrong in both directions.

Loyalty is assessed on a different and usually wider base — eligible guest folio or qualifying revenue, which can include food, beverage and other spend — and it applies only to the share of stays booked by members. Adding it to a rooms-base percentage produces a number that is a percentage of nothing. Omitting it understates the cost of a brand whose member share is high. It belongs in an underwrite as its own line, against its own base, with an assumed member mix — which is how we carry it.

How this database is built

Every figure here traces to a filed document. There is no survey, no operator panel and no modelled estimate.

1. The document, not a summary. Each franchisor's current FDD is parsed directly from the PDF, preserving the column layout of the Item 5 and Item 6 fee tables. The fee tables wrap across page breaks and interleave their columns; text extracted without that layout silently loses a large share of the rows.
2. Every fee, not just the headline. 9,338 individual line items are captured, each with the amount exactly as printed, its due date, its remarks and the revenue base it is assessed on.
3. A canonical taxonomy. “Royalty Fee”, “Continuing Fees”, “Monthly Fee” and “Bundled Franchise Fee” are the same economic line under four names. Each fee is mapped to a canonical component and to a role — recurring percentage, recurring fixed, one time, or contingent — because a $10,000 transfer fee and a 6% royalty are both “fees” and belong in completely different places in a model.
4. Confidence, preserved. Every parsed row is scored. Anything where the fee name reads like prose, or a rate arrived without the base it is charged on, is quarantined for human review rather than published. A silently wrong royalty is far more damaging in an underwrite than a visibly missing one.
5. Reconciled before release. The headline rooms-base total is computed twice by independent paths and the two must agree exactly, per brand, before anything is published. This edition reconciles at 147 of 147.

Citation

PivotPt Capital Corp, The 2026 Hotel Franchise Fee Guide, August 2026. Derived from currently effective US franchise disclosure documents, Items 5 and 6. Brand names and marks are the property of their respective owners and appear here as the subjects of public regulatory filings, not as endorsements.