Top 250 Franchise by Entrepreneur – Rank no.153 – Red Roof Inns – US
Products & Services: Economy hotels
Number of Locations: 348
Total Investment: $3.4M – 4.48M
Began Franchising: 1996
About Red Roof Inns
James Trueman, a builder and contractor, opened the first Red Roof Inn in Columbus, Ohio, in 1993. The company’s original slogan, “Sleep Cheap," was reflective of its initial nightly room rates of $8.50. Today the economy hotel chain, which began franchising in 1996, has locations throughout the country, but primarily in the Midwest, Southern, and Eastern U.S.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $27,000
Ongoing Royalty Fee: 4.5%
Term of Franchise Agreement: 20 years, renewable
How This Franchise Supports Franchisees
Red Roof Inn is an economy hotel chain in the United States. Red Roof Inn properties are often distinguished by the large dark-red shingle roof that gives them their name. There are over 340 Red Roof Inns, primarily in the Midwest, Southern, and Eastern United States. Standard amenities include: bedding, cable television, clock radios, coffee and cappuccino centers located in the lobby, and free unlimited local calling. Certain locations may provide a continental breakfast and swimming pool. All-Inclusive King rooms provide free high-speed wireless internet access, and unlimited free local and long-distance calling. Red Roof Inn is a pet-friendly hotel chain.
The Red Roof Inn chain began in Columbus, Ohio. The company was founded by Jim Trueman in 1972 with the intention to provide guests with a clean, comfortable room at an affordable price. The oldest hotel (Inn #3) still operating as a Red Roof Inn is located on East Cork Street in Kalamazoo, Michigan. It was built in 1973 and last renovated in 2004.
The original slogan was “Sleep Cheap." T-shirts were sold on property with this slogan, and they became popular.With the increase of prices due to inflation in 1987 and 1988, the prices of the chain, while still lower than most of its direct competitors like Budgetel (now Baymont) and Days Inn, were too high to be cheap. Thus, the slogan was changed to “Hit The Roof."
Accor acquired Red Roof Inns in 1999 for $1.115 billion,adding 324 properties and 37,208 rooms.
In April 2007, Accor announced the sale of Red Roof Inns to Citigroup Global Special Situations Group and Westbridge Hospitality Fund LP for $1.3 billion. As part of the sale, some locations will be re-branded as part of Accor’s flagship North American brand, Motel 6, which Accor will focus exclusively on the North American market after the sale is complete.
Today, Red Roof has 345 inns in 36 states, employs over 6,000 people and serves millions of guests each year.