Howard Johnson franchise cost
Howard Johnson (Wyndham Hotels & Resorts) charges a royalty of 5% of gross room revenue plus a further 2% in marketing, reservation or system fees, according to its franchise disclosure document issued March 31, 2025, as amended April 11, 2025. The franchisor estimates the total cost of a new-build hotel at $6,681,950 to $11,539,776, not counting land; converting an existing hotel runs $347,215 to $3,268,265.
- Royalty
- 5%of gross room revenue
- Marketing
- 2%of gross rooms revenue
- Fee to take over on a purchase
- None statedItem 5 lists no separate transfer fee. Ask Wyndham Hotels & Resorts what it charges on a change of ownership.
- Fee for a new franchise
- $35,000Item 5 formula at 60 rooms. Fees actually charged can be lower; see the notes below.
- Total investment
- $6.68M to $11.5MItem 7 estimate for a new-build hotel
Recurring fees in the 2025 FDD
| Royalty | 5.0% of GRR |
|---|---|
| Marketing or brand fund | Marketing Contribution 2% of GRR (subject to change if approved by the International Operators' Council) |
| Reservation, loyalty and technology | Room Sales Charge 1.5% of GRR ("Subject to change to cover costs of the Reservation System"); plus Signature Reservation Service (SRS) Reservation Service Fee: currently 3.5% of the amount of GRR booked (SRS participation required); Loyalty Program Charge (Wyndham Rewards): 4.25% to 5.5% of all amounts on which members earn points or other program currency; GDS Fee $1.98 per reservation; Third Party Channel and Internet Booking Fees $1.98 per reservation; Digital Pay-For-Performance commission: currently 7% (up to 10%) of GRR on qualifying consumed reservations |
| Initial fee (Item 5) | $2,500 non-refundable Application Fee (credited); Initial Fee (new construction or conversion) = greater of $35,000 or $350 per guest room |
| New build (Item 7) | $6,681,950 to $11,539,776 |
| Conversion (Item 7) | $347,215 to $3,268,265 |
| What Item 7 assumes | Two tables: 100-room new construction; 100-room conversion. Excludes land. |
From the filing: Cost per room: new $66,820-$115,398; conversion $3,472-$32,683. Item 7 tables state they do not include the cost of purchasing or leasing real estate.
This is the newest Wyndham FDD a state regulator publishes. Wyndham claimed an exemption in Minnesota in 2026, so the 2025 filing there is the latest public copy; the 2026 fees may differ.
What the fees cost a 60-room hotel
Take a 60-room Howard Johnson with $1,500,000 of rooms revenue a year. The royalty and the marketing or system fees that apply to every room night come to 8.5%, or $127,500 a year. That is $127,500 a year, about $10,625 a month, before payroll or utilities. Fees charged only on some bookings, such as loyalty-member stays, central reservation bookings and online commissions, come on top.
Those fees come straight off NOI. At 1.25x coverage, $127,500 of fees is $102,000 a year of payment you can no longer borrow against, or about $940,000 of loan at 10% over 25 years.
Fees billed per reservation, per transaction or as a fixed amount are not in this total; they are listed in the table above as the FDD states them. Run your own numbers with Howard Johnson fees filled in.
Financing a Howard Johnson
Lenders read the franchise agreement as closely as the appraisal. On a purchase, expect the brand to require a change-of-ownership application, a new franchise agreement on current terms and often a property improvement plan (PIP), and expect the lender to fold the PIP cost into the project. For a new build, the Item 7 range is the starting point for the construction budget a lender will test.
Most owner-operators finance a branded hotel with an SBA 7(a) or 504 loan. Read SBA 7(a) for hotels and SBA 504 for hotels, or send the deal to Janover Capital.
Source
Howard Johnson Franchise Disclosure Document, issued March 31, 2025, as amended April 11, 2025, as filed with the Minnesota Department of Commerce (CARDS). Item 5 p.25, Item 6 p.28, Item 7 p.41-49. View the filing record. Fees change every year and the franchise agreement you sign controls. Read on 2026-10-24.
Other Wyndham Hotels & Resorts brands
- AmericInn: royalty 5%, all percent fees 8.25%
- Baymont: royalty 5%, all percent fees 8.5%
- Days Inn: royalty 5.5%, all percent fees 9.3%
- ECHO Suites: royalty 5.5%, all percent fees 9%
- Hawthorn Suites: royalty 5.5%, all percent fees 8%
- La Quinta: royalty 6%, all percent fees 9.5%
- Microtel: royalty 6%, all percent fees 8%
- Ramada: royalty 5%, all percent fees 8.5%
- Super 8: royalty 5.5%, all percent fees 8.5%
- Trademark Collection: royalty 5.5%, all percent fees 7.5%
- Travelodge: royalty 5%, all percent fees 8.5%
- Wingate: royalty 5.5%, all percent fees 8.5%
- Wyndham Garden: royalty 5%, all percent fees 8%
Buying or building a Howard Johnson?
Send the deal to Janover Capital, which runs this site and arranges hotel financing through lenders.