Source: FranopolisThe Red Collection
Sources2026 FDD Research
FDD Edition2026Sources
What It Costs
SourcesDisclosed Startup Investment$222,875 to $1,611,250
Your location, business format and operating plan can change the total.
Where Your Startup Money Goes
| Cost | Disclosed Amount | Source |
|---|---|---|
| Landscaping, low estimate | $0 to $46,350 | 2026 FDD · PDF Page 26 Lump Sum Prior to Opening TRC Landscaping (Note 3) $0 $46,350 |
| Additional Funds (3 Months), low estimate | $112,000 to $154,000 | 2026 FDD · PDF Page 27 Lump Sum Upon commencement of training TRC Additional Funds (3 Months) (Note 13) $112,000 $154,000 |
| Total initial investment, low estimate | $222,875 to $1,611,250 | 2026 FDD · PDF Page 27 As Arranged As Incurred Vendors & Employees TOTAL (Note 14) $222,875 $1,611,250 |
| Opening Inventory and Supplies, low estimate | $8,125 to $49,000 | 2026 FDD · PDF Page 26 Lump Sum Prior to Opening Installers & Vendors Opening Inventory and Supplies (Note 8) $8,125 $49,000 |
| Signage, low estimate | $12,000 to $67,000 | 2026 FDD · PDF Page 26 Lump Sum Prior to Opening Vendors Signage (Note 7) $12,000 $67,000 |
| Application Fee/Initial Franchise Fee for 65-room conversion property | $35,000 | 2026 FDD · PDF Page 26 TRC – 04/26 FDD 20 ITEM 7 ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT ESTIMATED EXPENDITURES FOR A 65 ROOM CONVERSION PROPERTY TYPE OF EXPENDITURE AMOUNT (LOW) AMOUNT (HIGH) METHOD OF PAYMENT WHEN DUE TO WHOM PAYMENT IS TO BE MADE Application Fee/Initial Franchise Fee (Note 1) $35,000 $35,000 |
| Facility Construction and/or Renovation, low estimate | $6,500 to $548,800 | 2026 FDD · PDF Page 26 As arranged Prior to Opening Contractors & Vendors Facility Construction and/or Renovation (Note 4) $6,500 $548,800 |
| Voice Telephone System, low estimate | $0 to $24,000 | 2026 FDD · PDF Page 26 Lump Sum As Arranged Vendors Voice Telephone System (Note 9) $0 $24,000 |
| Reservation Platform / PMS Software License Fee and Computer Systems including Front Desk and Back-Office, low estimate | $16,500 to $18,000 | 2026 FDD · PDF Page 26 Lump Sum Prior to Opening Vendors Reservation Platform / PMS Software License Fee and Computer Systems including Front Desk and Back-Office (Note 10) $16,500 $18,000 |
| Opening Package, low estimate | $2,500 to $5,000 | 2026 FDD · PDF Page 26 due upon execution of the Franchise Agreement TRC Opening Package (Note 2) $2,500 $5,000 |
| Furniture, Fixtures, Soft Goods and Equipment, low estimate | $24,750 to $555,500 | 2026 FDD · PDF Page 26 As arranged Prior to Opening Contractors, Subcontractors, Construction Managers & Vendors Furniture, Fixtures, Soft Goods and Equipment (Note 5) $24,750 $555,500 |
| Training Expenses, low estimate for 65-room conversion | $5,500 to $9,100 | 2026 FDD · PDF Page 27 TRC – 04/26 FDD 21 ESTIMATED EXPENDITURES FOR A 65 ROOM CONVERSION PROPERTY TYPE OF EXPENDITURE AMOUNT (LOW) AMOUNT (HIGH) METHOD OF PAYMENT WHEN DUE TO WHOM PAYMENT IS TO BE MADE Training Expenses (Note 12) $5,500 $9,100 |
| Insurance, low estimate | $0 to $73,500 | 2026 FDD · PDF Page 26 Lump Sum Prior to Opening TRC, Installers & Vendors Insurance (Note 11) $0 $73,500 |
| Guest Wi-Fi System, low estimate | $0 to $26,000 | 2026 FDD · PDF Page 26 As Ordered Prior to Opening Vendors Guest Wi-Fi System (Note 6) $0 $26,000 |
Line items are shown as disclosed. Some costs overlap or apply to different formats; do not add them together without reviewing the source.
SourcesFees And Payment Terms
| Fee | Disclosed Terms | Source |
|---|---|---|
| Opening Package amount retained by franchisor, low — $101 | ces and for the production of the training materials. We will retain a portion of the cost for our services in coordinating the photo shoot and preparing the training materials, which will range from $101 to $1,200. The cost of the Opening Package is not refundable under any circumstances. Training Fees Before your Inn opens, you or your General Manager must complete the first two phases of RED Advantage Training and pay a fee for such training in the amount of $1,000 to $1,250 and your owners must attend New Owner Orientation and pay a fee for such training in the amount of $1,000 to $1,600 per person. Additionally, a trainer will visit your Inn the week before or the week of your opening and provide additional training for a fee of $4,500 to $5,000, which will be due upon completion of the training. In the event the on-site training is rescheduled, any rebooking of travel expenses asso | 2026 FDD · PDF Page 14 |
| New Owner Orientation fee per person, low — $1,000 | o phases of RED Advantage Training and pay a fee for such training in the amount of $1,000 to $1,250 and your owners must attend New Owner Orientation and pay a fee for such training in the amount of $1,000 to $1,600 per person. Additionally, a trainer will visit your Inn the week before or the week of your opening and provide additional training for a fee of $4,500 to $5,000, which will be due upon completion of the training. In the event the on-site training is rescheduled, any rebooking of travel expenses associated with the rescheduling will be charged back to you. None of the training fees are refundable under any circumstances. Reservation Platform / PMS You must use the Reservation Platform / PMS and use computer systems that support the Reservation Platform / PMS and otherwise meet our standards and specifications. You must sign the Reservation Platform Property Management Softwa | 2026 FDD · PDF Page 14 |
| Late Fee — $50 plus interest | llowed by applicable law, whichever is less Upon demand Payable if a payment (check, ACH or credit card) for any fees or any other payment due us fails to clear. Late Fee; Interest on Overdue Amounts $50 plus the lesser of 1.5% per month or the maximum rate permitted by law Upon demand Interest accrues on all overdue amounts from the date payment was due until such amount is paid. Cyber Insurance Premium price of the insurance (approximately $550 to $5,200 depending on the Gross Room Revenues of the Hotel) Payable annually 20 days after the invoice date We may procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. Insurance Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to | 2026 FDD · PDF Page 21 |
| RediBill fee, high — 6% of centrally billed room revenue | Standard on Rates or failure to correct a violation after several notices. The fee may be assessed in response to a RediPromise claim or rate shops conducted by us or our affiliates. RediBill® 5% to 6% of all RediBill room revenue that is billed centrally to a client. Varies You will be required to participate in the RediBill program, which offers centralized nationwide billing privileges to companies who utilize an approved volume of room nights annually. It provides companies with the option to maintain the privilege by making advanced reservations or to allow their employees to use the account upon walk in providing they provide the VolumePlan Plus® number for their company along with the company name associated with the | 2026 FDD · PDF Page 23 |
| GDS booking fee, low — $6.60 | els. If we institute a centralized billing program where participation is required by franchisees under our Standards, you must pay us the fees assessed for participation in the program. Booking Fees $6.60 to $7.00 per GDS booking, $3.30 to $3.60 per third party internet booking, $1.99 to $2.25 per direct connect booking Payable 20 days after the invoice date All The Red Collection hotels are represented in all major GDS systems and select third party internet systems. The current fees are listed. These fees may change during the term of the franchise. Additional third party internet systems are offered for optional participation. Mobile App Booking Fee $1.75 per net booking Payable 20 days after the invoice date The Mobile App Booking Fee will be used for the development, operation and ongoing cost of mobile reservations Professional Photography Services $750 to $2,199 Payable 20 days a | 2026 FDD · PDF Page 16 |
| General Manager Training other than pre-opening or transfer, low — $1,000 | change. When training is conducted at any other location, you are responsible for your own expenses and those of your employees. General Manager Training (Other than Pre-Opening or Transfer Training) $1,000 to $1,250 Upon demand If you add or replace a General Manager, the new General Manager must complete RED Advantage virtual training within 90 days of hire. | 2026 FDD · PDF Page 19 |
| Overdue interest — lesser of 1.5% per month or maximum permitted by law | w, whichever is less Upon demand Payable if a payment (check, ACH or credit card) for any fees or any other payment due us fails to clear. Late Fee; Interest on Overdue Amounts $50 plus the lesser of 1.5% per month or the maximum rate permitted by law Upon demand Interest accrues on all overdue amounts from the date payment was due until such amount is paid. Cyber Insurance Premium price of the insurance (approximately $550 to $5,200 depending on the Gross Room Revenues of the Hotel) Payable annually 20 days after the invoice date We may procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. Insurance Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to $17,500 for each insta | 2026 FDD · PDF Page 21 |
| Insurance Noncompliance third notice maximum — $10,000 | mburse us for our costs of obtaining the coverage for you. Insurance Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to $17,500 for each instance of noncompliance) Upon demand Payable if you fail to procure and maintain the insurance we require. Insurance Procurement The premium price of any insurance we procure for you, plus an administrative fee of up to $2,500 Upon demand Payable only if you fail to procure insurance and we do it for you. We are not obligated to procure insurance for you. Public Securities Offering $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed offering, including legal and accounting fees Upon demand We limit our review to the subject of our relationsh | 2026 FDD · PDF Page 21 |
| Opening Package, low — $2,500 | accordance with our Standards to generate photographs that can be used across all distribution channels. We will provide you with the photographs for your use (the “Opening Package”). You must pay us $2,500 to $5,000 upon receipt of our invoice for the Opening Package, which includes a professional photo shoot and training materials. We will pay for the photography services and for the production of the training materials. We will retain a portion of the cost for our services in coordinating the photo shoot and preparing the training materials, which will range from $101 to $1,200. The cost of the Opening Package is not refundable under any circumstances. Training Fees Before your Inn opens, you or your General Manager must complete the first two phases of RED Advantage Training and pay a fee for such training in the amount of $1,000 to $1,250 and your owners must attend New Owner Orient | 2026 FDD · PDF Page 14 |
| On-Site Quality Audit Fee, low — $2,500 | th the property staff will be required to attend and participate in on-site quality training. The fee for the training will be based on the number of training days required. On-Site Quality Audit Fee $2,500 to $10,000 Upon demand If you fail to meet our quality and guest satisfaction standards we may conduct unannounced on-site quality and property improvement plan audits. Continued failure to meet our quality and guest satisfaction standards will result in an escalating fee for each additional time we complete an audit. The first audit is $2,500 and doubles annually up to $10,000 if your quality performance score is not brought up to the brand average or sub-brand quality performance score goal, whichever is lower. On-Site Quality Training Rescheduling Fee $500 per occurrence plus the cost of consumed, cancelled, or lost travel expenses Upon demand We may charge this fee if you do not c | 2026 FDD · PDF Page 19 |
| Unauthorized Closure or Remodel Fee — $25,000 | TRC – 04/26 FDD 16 Type of Fee Amount Due Date Remarks time we must spend investigating the supplier and if we need to visit the supplier’s facilities. Indemnification Varies based on the circumstances Upon demand You must reimburse us for dealing with claims we defend and expenses we incur arising from your operation of the Hotel. Liquidated Damages Pre-opening: $100,000; Post-opening: the greater of (a) $100,000 or (b) the average of the monthly Royalty Fee, Marketing and Reservations Fee and RediRewards ® Preferred Members Program Fee required by the Franchise Agreement for the 36 months preceding termination (or if you have been operating the Hotel as a franchisee of TRC for less than 36 months, the average of the months you operated the Hotel as a franchisee of TRC before termination), multiplied by the lesser of (i) 36, or (ii) the number of months remaining in the term of the Franchise Agreement Within five days of termination or our request You must pay us liquidated damages if the Franchise Agreement is terminated prior to the expiration date, unless otherwise specified in the Franchise Agreement. Unauthorized Closure or Remodel Fee $25,000 Upon demand You must pay us this fee if you cease to operate the Hotel at full capacity and/or commence any unauthorized remodel or renovation of the Hotel prior to the expiration date of your Franchise Agreement. | 2026 FDD · PDF Page 22 |
| Public Securities Offering fee alternative — $10,000 | lus an administrative fee of up to $2,500 Upon demand Payable only if you fail to procure insurance and we do it for you. We are not obligated to procure insurance for you. Public Securities Offering $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed offering, including legal and accounting fees Upon demand We limit our review to the subject of our relationship. This fee is in addition to the fees otherwise payable upon transfer. Cooperative Contribution A maximum of 1% of Gross Room Revenues If charged, same as Royalty Fee We do not currently have any approved advertising cooperatives. If such a cooperative is created and your Hotel is within the territory of a cooperative, you will contribute to the cooperative. Supplier Testing Fee $1,000 to $2,500 Upon demand Payable only when you request that we approve an unapproved | 2026 FDD · PDF Page 21 |
| Reservation call transfer outside RediCall fee maximum per call — $5.00 | trained reservation agents and Front Desk calls will be forwarded to your Hotel. If your Hotel transfers reservation calls to the call center outside of the RediCall program, you may be billed up to $5.00 per call. You will sign the RediCall Agreement attached as Exhibit R if you elect to use the RediCall program. Credit Card Payment Surcharge 2.8% Per transaction If you choose to make payments to us via credit card, we will assess this surcharge. Reservation Platform / PMS Fee; Help Desk; Hardware and Software Support and Maintenance Currently $490 per month plus $3.85 per room, per month; fee may be increased annually by up to 5% Payable 20 days after the invoice date We provide these services through a combination of in-house IT resources and outside suppliers. See Items 8 and 11. Desktop Protection and Maintenance Fee $200 to $250 per device Annually This fee covers service related t | 2026 FDD · PDF Page 17 |
| Rooms Addition Fee per additional guest room — $450 | s only using your one property. American Hotel & Lodging Membership (“AH&LA”) $3.00 per room per year Annually You must pay this fee for membership to the AH&LA unless you opt out. Rooms Addition Fee $450 per additional guest room Upon signing amendment to Franchise Agreement Payable for rooms added to the Hotel. We will require you to sign an amendment to the Franchise Agreement to include the additional rooms. Digital Marketing Fee for Search Engine Optimization and Hotel Localized Marketing Initial Fee of $1,250, thereafter annual fee of $750 Payable on the date specified on the invoice We will create and maintain on an ongoing basis local listings with search engine optimized content focusing on the property experience to drive organic search traffic and direct hotel revenue. REDvenue Optimizer Program $525 to $1,195 Plus a quarterly bonus of up to $300 if your Hotel achieves certain | 2026 FDD · PDF Page 24 |
| RediBill fee, low — 5% of centrally billed room revenue | Brand Standard on Rates or failure to correct a violation after several notices. The fee may be assessed in response to a RediPromise claim or rate shops conducted by us or our affiliates. RediBill® 5% to 6% of all RediBill room revenue that is billed centrally to a client. Varies You will be required to participate in the RediBill program, which offers centralized nationwide billing privileges to companies who utilize an approved volume of room nights annually. It provides companies with the option to maintain the privilege by making advanced reservations or to allow their employees to use the account upon walk in providing they provide the VolumePlan Plus® number for their company along with the company name associated with the | 2026 FDD · PDF Page 23 |
| Reservation Platform / PMS software license fee — $15,000 | You must sign the Reservation Platform Property Management Software Sublicense Agreement (Exhibit H) and pay us a software license fee for your use of the Reservation Platform / PMS in the amount of $15,000. The software license fee is not refundable under any circumstances. Re-Visit Fee If you notify us that your Hotel is ready for opening and our personnel visit your Hotel and we determine that your Hotel has not satisfied all requirements to open as a The Red Collection hotel, you must pay a re-visit fee of $2,250 to $5,000 before we will authorize you to open your Hotel. The re-visit fee is not refundable under any circumstances. Franchise Referral Credit If a The Red Collection franchisee refers a prospective franchisee to us and that prospective franchisee ultimately purchases a franchise for a The Red Collection hotel, we currently (1) pay the referring franchisee $5,000 or (2) p | 2026 FDD · PDF Page 14 |
| Failure to Accommodate Group Booking Fee — $250 | based on the number of photographs needed. You must use one of our approved photography studios. We will pass this payment through to the photography studios. Failure to Accommodate Group Booking Fee $250 Payable upon invoice You must pay this fee if you confirmed a group booking of ten or more rooms (with confirmation number(s) or a signed group booking agreement) that your Hotel does not fulfill due to overbooking, | 2026 FDD · PDF Page 16 |
| On-Site Quality Training Fee, low — $2,250 | TRC – 04/26 FDD 13 Type of Fee Amount Due Date Remarks days of the scheduled opening date of the Hotel. On-Site Quality Training Fee $2,250 to $5,000 Upon demand If you fail to meet our quality and guest satisfaction standards, you or your certified Manager along with the property staff will be required to attend and participate in on-site quality training. The fee for the training will be based on the number of training days required. On-Site Quality Audit Fee $2,500 to $10,000 Upon demand If you fail to meet our quality and guest satisfaction standards we may conduct unannounced on-site quality and property improvement plan audits. Continued failure to meet our quality and guest satisfaction standards will result in an escalating fee for each additional time we complete an audit. The first audit is $2,500 and doubles an | 2026 FDD · PDF Page 19 |
| REDvenue Optimizer Program quarterly performance bonus maximum — $300 | search engine optimized content focusing on the property experience to drive organic search traffic and direct hotel revenue. REDvenue Optimizer Program $525 to $1,195 Plus a quarterly bonus of up to $300 if your Hotel achieves certain targets Monthly Your participation in this program is generally optional unless your hotel operates as a dual branded hotel with one of our Affiliate’s hotel brands, in which case, this program is required. Participation requires a separate Revenue Management Agreement (Exhibit N). The REDvenue Optimizer Program provides you with the services of a Revenue Manager. Performance varies by Hotel, location, market and experience of the Operator. We do not represent or warrant that your Hotel’s performance will improve, and we are not liable for poor performance. Digital Performance Marketing Program Currently, the fee is no less than 3% of Gross Room Revenues f | 2026 FDD · PDF Page 24 |
| Supplier Testing Fee, low — $1,000 | ntly have any approved advertising cooperatives. If such a cooperative is created and your Hotel is within the territory of a cooperative, you will contribute to the cooperative. Supplier Testing Fee $1,000 to $2,500 Upon demand Payable only when you request that we approve an unapproved supplier. The amount of the fee will depend on the | 2026 FDD · PDF Page 21 |
| Returned Payment Fee — lesser of $50 or amount allowed by law | TRC – 04/26 FDD 15 Type of Fee Amount Due Date Remarks costs and expenses we incur in connection with a re-audit Returned Payment Fee $50 or the amount allowed by applicable law, whichever is less Upon demand Payable if a payment (check, ACH or credit card) for any fees or any other payment due us fails to clear. Late Fee; Interest on Overdue Amounts $50 plus the lesser of 1.5% per month or the maximum rate permitted by law Upon demand Interest accrues on all overdue amounts from the date payment was due until such amount is paid. Cyber Insurance Premium price of the insurance (approximately $550 to $5,200 depending on the Gross Room Revenues of the Hotel) Payable annually 20 days after the invoice date We may procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage | 2026 FDD · PDF Page 21 |
| Renewal Fee — 50% of then-current initial franchise fee | pon reinstatement of your Franchise Payable in addition to all applicable amounts owed to restore your Franchise after termination or after removing the Hotel from the Reservation System. Renewal Fee 50% of the then-current initial franchise fee Upon renewal Payable upon approval of your renewal application. Audit Fee If audit finds underpayment of 2% or more, all costs and expenses we incur in connection with the audit in addition to paying the amount owed and interest; if you fail to produce required documents at audit, all Upon demand Amounts payable include our third party auditor fees, and the travel expenses and room and board for our representatives and/or our third party auditor’s representatives conducting the audit as well as the expenses of conducting a re-audit. | 2026 FDD · PDF Page 20 |
| Insurance Noncompliance second notice maximum — $5,000 | cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. Insurance Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to $17,500 for each instance of noncompliance) Upon demand Payable if you fail to procure and maintain the insurance we require. Insurance Procurement The premium price of any insurance we procure for you, plus an administrative fee of up to $2,500 Upon demand Payable only if you fail to procure insurance and we do it for you. We are not obligated to procure insurance for you. Public Securities Offering $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed offering, including legal and accounting fees Upon d | 2026 FDD · PDF Page 21 |
| De-Identification Fee per day — $2,500 | TRC – 04/26 FDD 17 Type of Fee Amount Due Date Remarks De-Identification Fee $2,500 per day that you continue to use our intellectual property following the expiration or termination of the Franchise Agreement plus our attorney’s fees if we file an action to enforce this requirement Upon demand If you continue to use our intellectual property after the expiration or termination of the Franchise Agreement, you must pay this fee to compensate us for damage to our ownership interest in our intellectual property. You will have 15 days from the date of expiration or termination to remove all non-high-rise signs and 30 days from the date of expiration or termination to remove all high-rise signs. RediPromise® Penalty Fee $75 to $100 Upon demand You must participate in the | 2026 FDD · PDF Page 23 |
| Reservation Platform / PMS fee per room per month — $3.85 | ou choose to make payments to us via credit card, we will assess this surcharge. Reservation Platform / PMS Fee; Help Desk; Hardware and Software Support and Maintenance Currently $490 per month plus $3.85 per room, per month; fee may be increased annually by up to 5% Payable 20 days after the invoice date We provide these services through a combination of in-house IT resources and outside suppliers. See Items 8 and 11. Desktop Protection and Maintenance Fee $200 to $250 per device Annually This fee covers service related to the installation of anti-virus, patching and web filtering software as well as the monitoring and proactive maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days af | 2026 FDD · PDF Page 17 |
| RED Advantage Non-Completion Fee per quarter — $500 | odging and wages for all attendees of these conferences/meetings. The current fee for failure to attend a regional or an annual conference is between $500 and $2,500. RED Advantage Non-Completion Fee $500 per quarter for non- completion Upon demand We may charge a RED Advantage non-completion fee for not completing all RED Advantage courses within 90 | 2026 FDD · PDF Page 18 |
| On-Site Quality Training Rescheduling Fee per occurrence plus travel expenses — $500 | ually up to $10,000 if your quality performance score is not brought up to the brand average or sub-brand quality performance score goal, whichever is lower. On-Site Quality Training Rescheduling Fee $500 per occurrence plus the cost of consumed, cancelled, or lost travel expenses Upon demand We may charge this fee if you do not comply with the scheduling of the On- Site Quality Training once those dates have been set by our trainers. Continuing Education $900 to $1,200 Upon demand We will require you or your employees to attend additional or refresher training programs hosted on the Red Roof Learning Management System as well as live Webinars. An example of such training might include, but is not limited to human trafficking prevention training, continuing education courses or training you receive if your quality or service metrics fall to a level that is negatively impacting the busine | 2026 FDD · PDF Page 19 |
| New Owner Orientation per person, low — $1,000 | – 04/26 FDD 14 Type of Fee Amount Due Date Remarks Third Party Training Varies Varies We may require you to participate in and pay a fee for training conducted by a third party. New Owner Orientation $1,000 to $1,600 per person Upon demand Payable prior to opening for your owners and payable when there is a majority ownership change and the new majority owner attends the New Owner Orientation. Attendance is mandatory within six months of a property opening or transfer. Guest Relations Intervention Fee Currently, $150 per escalation Upon demand If we have to intervene to resolve a guest complaint, we will assess this fee, which we may modify at our discretion. You also must reimburse us for any payment or other consideration we may furnish the guest to resolve the complaint. Guest Relations Watchlist Currently, $195 per intervention Upon demand For properties ranking in the bottom 20% of | 2026 FDD · PDF Page 20 |
| Consortia Participation Fee maximum — 20% of qualifying reservation Gross Room Revenues | conditions, or health and safety concerns. This fee is in addition to all costs that you will incur to relocate the guests to another property under our walk policy. Consortia Participation Fee Up to 20% of Gross Room Revenues generated on qualifying reservations When we or an agency invoice you The fee is for our consortia agency program that incurs fees based on consumption versus advance subscription fee. RediCall $1.55 to $1.75 per call or $6.00 per confirmed reservation, with a minimum of $75 per month Payable 20 days after the invoice date The optional RediCall program allows your Hotel to have a unique call center number posted on search engines, local business listings, and other internet websites or applications. The program includes a centralized auto attendant customized for each Hotel. Reservation calls will be handled by trained reservation agents and Front Desk calls will b | 2026 FDD · PDF Page 17 |
| Initial Franchise Fee per guest room above threshold — $300 | Application Fee When you submit an Application, you must pay us an application fee in the amount of $5,000. If we reject your Application, we will refund your application fee if we or our representatives have not visited your site or the area surrounding your site in connection with your Application or provided you with written architectural drawings or technical information. We do not offer refunds of the application fee under any other circumstances. Initial Franchise Fee You must pay a lump sum initial franchise fee when you sign the Franchise Agreement in the amount of $30,000 for hotels with up to 100 guest rooms. You must pay an additional $300 for each additional guest room. Once the initial franchise fee is paid, there are no refunds under any circumstances. This amount is in addition to the application fee. Cyber Liability Insurance We procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. You must pay for the first year of coverage prior to opening your Hotel, | 2026 FDD · PDF Page 13 |
| Continuing Education, low — $900 | lost travel expenses Upon demand We may charge this fee if you do not comply with the scheduling of the On- Site Quality Training once those dates have been set by our trainers. Continuing Education $900 to $1,200 Upon demand We will require you or your employees to attend additional or refresher training programs hosted on the Red Roof Learning Management System as well as live Webinars. An example of such training might include, but is not limited to human trafficking prevention training, continuing education courses or training you receive if your quality or service metrics fall to a level that is negatively impacting the business. Such costs are subject to change. When training is conducted at any other location, you are responsible for your own expenses and those of your employees. General Manager Training (Other than Pre-Opening or Transfer Training) $1,000 to $1,250 Upon demand I | 2026 FDD · PDF Page 19 |
| Insurance Noncompliance first notice maximum — $2,500 | nnually 20 days after the invoice date We may procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. Insurance Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to $17,500 for each instance of noncompliance) Upon demand Payable if you fail to procure and maintain the insurance we require. Insurance Procurement The premium price of any insurance we procure for you, plus an administrative fee of up to $2,500 Upon demand Payable only if you fail to procure insurance and we do it for you. We are not obligated to procure insurance for you. Public Securities Offering $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed | 2026 FDD · PDF Page 21 |
| Pre-opening Re-Visit Fee, low — $2,250 | Hotel is ready for opening and our personnel visit your Hotel and we determine that your Hotel has not satisfied all requirements to open as a The Red Collection hotel, you must pay a re-visit fee of $2,250 to $5,000 before we will authorize you to open your Hotel. The re-visit fee is not refundable under any circumstances. Franchise Referral Credit If a The Red Collection franchisee refers a prospective franchisee to us and that prospective franchisee ultimately purchases a franchise for a The Red Collection hotel, we currently (1) pay the referring franchisee $5,000 or (2) provide the referring franchisee with a quarter percentage point reduction in Royalty Fees for a period of up to one year (for a maximum value of $3,000). The referring franchisee must be current on all fees to us to be eligible for the Franchise Referral Credit. We may discontinue this practice or change the amount | 2026 FDD · PDF Page 14 |
| Application Fee — $5,000 | Application Fee When you submit an Application, you must pay us an application fee in the amount of $5,000. If we reject your Application, we will refund your application fee if we or our representatives have not visited your site or the area surrounding your site in connection with your Application or provided you with written architectural drawings or technical information. We do not offer refunds of the application fee under any other circumstances. Initial Franchise Fee You must pay a lump sum initial franchise fee when you sign the Franchise Agreement in the amount of $30,000 for hotels with up to 100 guest rooms. You must pay an additional $300 for each additional guest room. Once the initial franchise fee is paid, there are no refunds under any circumstances. This amount is in addition to the application fee. Cyber Liability Insurance We procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. You must pay for the first year of coverage prior to opening your Hotel, | 2026 FDD · PDF Page 13 |
| Credit Card Payment Surcharge per transaction — 2.8% | ide of the RediCall program, you may be billed up to $5.00 per call. You will sign the RediCall Agreement attached as Exhibit R if you elect to use the RediCall program. Credit Card Payment Surcharge 2.8% Per transaction If you choose to make payments to us via credit card, we will assess this surcharge. Reservation Platform / PMS Fee; Help Desk; Hardware and Software Support and Maintenance Currently $490 per month plus $3.85 per room, per month; fee may be increased annually by up to 5% Payable 20 days after the invoice date We provide these services through a combination of in-house IT resources and outside suppliers. See Items 8 and 11. Desktop Protection and Maintenance Fee $200 to $250 per device Annually This fee covers service related to the installation of anti-virus, patching and web filtering software as well as the monitoring and proactive maintenance of the computers at the f | 2026 FDD · PDF Page 17 |
| On-Site Quality Audit Fee maximum — $10,000 | inued failure to meet our quality and guest satisfaction standards will result in an escalating fee for each additional time we complete an audit. The first audit is $2,500 and doubles annually up to $10,000 if your quality performance score is not brought up to the brand average or sub-brand quality performance score goal, whichever is lower. On-Site Quality Training Rescheduling Fee $500 per occurrence plus the cost of consumed, cancelled, or lost travel expenses Upon demand We may charge this fee if you do not comply with the scheduling of the On- Site Quality Training once those dates have been set by our trainers. Continuing Education $900 to $1,200 Upon demand We will require you or your employees to attend additional or refresher training programs hosted on the Red Roof Learning Management System as well as live Webinars. An example of such training might include, but is not limit | 2026 FDD · PDF Page 19 |
| Guest Relations Watchlist eligibility — bottom 20% for negative responses | s for any payment or other consideration we may furnish the guest to resolve the complaint. Guest Relations Watchlist Currently, $195 per intervention Upon demand For properties ranking in the bottom 20% of all The Red Collection hotels for negative responses, we will review all guest relations cases to ensure reasonable resolution. You must also reimburse us for any payment or other consideration we may furnish the guest to reasonably resolve the complaint. Transfer Application Fee $2,500 Upon application to transfer your franchise We have the right to approve all transfers. We will evaluate your proposed transferee when we receive this fee. Transfer Fee $15,000 Upon the transfer of your Franchise Payable when the transaction closes; we will not recognize the transfer until this fee is paid. Reinstatement Fee Currently, $5,000 Upon reinstatement of your Franchise Payable in addition to | 2026 FDD · PDF Page 20 |
| Third-party internet booking fee, low — $3.30 | ed billing program where participation is required by franchisees under our Standards, you must pay us the fees assessed for participation in the program. Booking Fees $6.60 to $7.00 per GDS booking, $3.30 to $3.60 per third party internet booking, $1.99 to $2.25 per direct connect booking Payable 20 days after the invoice date All The Red Collection hotels are represented in all major GDS systems and select third party internet systems. The current fees are listed. These fees may change during the term of the franchise. Additional third party internet systems are offered for optional participation. Mobile App Booking Fee $1.75 per net booking Payable 20 days after the invoice date The Mobile App Booking Fee will be used for the development, operation and ongoing cost of mobile reservations Professional Photography Services $750 to $2,199 Payable 20 days after the invoice date You must h | 2026 FDD · PDF Page 16 |
| Reinstatement Fee — $5,000 | receive this fee. Transfer Fee $15,000 Upon the transfer of your Franchise Payable when the transaction closes; we will not recognize the transfer until this fee is paid. Reinstatement Fee Currently, $5,000 Upon reinstatement of your Franchise Payable in addition to all applicable amounts owed to restore your Franchise after termination or after removing the Hotel from the Reservation System. Renewal Fee 50% of the then-current initial franchise fee Upon renewal Payable upon approval of your renewal application. Audit Fee If audit finds underpayment of 2% or more, all costs and expenses we incur in connection with the audit in addition to paying the amount owed and interest; if you fail to produce required documents at audit, all Upon demand Amounts payable include our third party auditor fees, and the travel expenses and room and board for our representatives and/or our third party audi | 2026 FDD · PDF Page 20 |
| Guest Relations Watchlist fee per intervention — $195 | s fee, which we may modify at our discretion. You also must reimburse us for any payment or other consideration we may furnish the guest to resolve the complaint. Guest Relations Watchlist Currently, $195 per intervention Upon demand For properties ranking in the bottom 20% of all The Red Collection hotels for negative responses, we will review all guest relations cases to ensure reasonable resolution. You must also reimburse us for any payment or other consideration we may furnish the guest to reasonably resolve the complaint. Transfer Application Fee $2,500 Upon application to transfer your franchise We have the right to approve all transfers. We will evaluate your proposed transferee when we receive this fee. Transfer Fee $15,000 Upon the transfer of your Franchise Payable when the transaction closes; we will not recognize the transfer until this fee is paid. Reinstatement Fee Current | 2026 FDD · PDF Page 20 |
| Franchise Referral Credit royalty reduction maximum value — $3,000 | rently (1) pay the referring franchisee $5,000 or (2) provide the referring franchisee with a quarter percentage point reduction in Royalty Fees for a period of up to one year (for a maximum value of $3,000). The referring franchisee must be current on all fees to us to be eligible for the Franchise Referral Credit. We may discontinue this practice or change the amount of the Franchise Referral Credit at any time without notice. | 2026 FDD · PDF Page 14 |
| Audit reimbursement underpayment threshold — 2% or more | e Hotel from the Reservation System. Renewal Fee 50% of the then-current initial franchise fee Upon renewal Payable upon approval of your renewal application. Audit Fee If audit finds underpayment of 2% or more, all costs and expenses we incur in connection with the audit in addition to paying the amount owed and interest; if you fail to produce required documents at audit, all Upon demand Amounts payable include our third party auditor fees, and the travel expenses and room and board for our representatives and/or our third party auditor’s representatives conducting the audit as well as the expenses of conducting a re-audit. | 2026 FDD · PDF Page 20 |
| Revenue Management Software System maximum monthly fee — $400 | at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days after the invoice date You must use the revenue management software system that we designate, which integrates with the Reservation Platform / PMS that we license to you. The system provides revenue management, analytics, data retention, and price optimization features. You will pay us for this | 2026 FDD · PDF Page 17 |
| Optional RediCall per-call fee, low — $1.55 | enues generated on qualifying reservations When we or an agency invoice you The fee is for our consortia agency program that incurs fees based on consumption versus advance subscription fee. RediCall $1.55 to $1.75 per call or $6.00 per confirmed reservation, with a minimum of $75 per month Payable 20 days after the invoice date The optional RediCall program allows your Hotel to have a unique call center number posted on search engines, local business listings, and other internet websites or applications. The program includes a centralized auto attendant customized for each Hotel. Reservation calls will be handled by trained reservation agents and Front Desk calls will be forwarded to your Hotel. If your Hotel transfers reservation calls to the call center outside of the RediCall program, you may be billed up to $5.00 per call. You will sign the RediCall Agreement attached as Exhibit R i | 2026 FDD · PDF Page 17 |
| RediRewards Preferred Member Program maximum — 5% | TRC – 04/26 FDD 10 Type of Fee Amount Due Date Remarks well as merchandise and gift cards on the RediRewards site. The fee is currently 4% but is subject to increase (maximum of 5%) on written notice from us. Distribution Listing Fees, Commissions and Rebates 0% to 25% of any applicable net booking Payable 20 days after the invoice date You must reimburse us or our supplier for the amount of travel agency commissions, online travel agency commissions affiliate commissions, processing fees, corporate rebates, distribution listing fees, and request for proposal program fees paid on your behalf to third parties for reservations at your Hotel; or similar fees to be used for the development support and maintenance of direct connectivity to third party distribution channels. If we institute a centralized billing program where participation is required by franchisees under | 2026 FDD · PDF Page 16 |
| AH&LA membership fee per room per year — $3.00 | ekly on one invoice. You may also participate in similar, optional property level direct billing programs if the account is only using your one property. American Hotel & Lodging Membership (“AH&LA”) $3.00 per room per year Annually You must pay this fee for membership to the AH&LA unless you opt out. Rooms Addition Fee $450 per additional guest room Upon signing amendment to Franchise Agreement Payable for rooms added to the Hotel. We will require you to sign an amendment to the Franchise Agreement to include the additional rooms. Digital Marketing Fee for Search Engine Optimization and Hotel Localized Marketing Initial Fee of $1,250, thereafter annual fee of $750 Payable on the date specified on the invoice We will create and maintain on an ongoing basis local listings with search engine optimized content focusing on the property experience to drive organic search traffic and direct ho | 2026 FDD · PDF Page 24 |
| Transfer Fee — $15,000 | ransfer Application Fee $2,500 Upon application to transfer your franchise We have the right to approve all transfers. We will evaluate your proposed transferee when we receive this fee. Transfer Fee $15,000 Upon the transfer of your Franchise Payable when the transaction closes; we will not recognize the transfer until this fee is paid. Reinstatement Fee Currently, $5,000 Upon reinstatement of your Franchise Payable in addition to all applicable amounts owed to restore your Franchise after termination or after removing the Hotel from the Reservation System. Renewal Fee 50% of the then-current initial franchise fee Upon renewal Payable upon approval of your renewal application. Audit Fee If audit finds underpayment of 2% or more, all costs and expenses we incur in connection with the audit in addition to paying the amount owed and interest; if you fail to produce required documents at au | 2026 FDD · PDF Page 20 |
| Pre-opening Liquidated Damages — $100,000 | TRC – 04/26 FDD 16 Type of Fee Amount Due Date Remarks time we must spend investigating the supplier and if we need to visit the supplier’s facilities. Indemnification Varies based on the circumstances Upon demand You must reimburse us for dealing with claims we defend and expenses we incur arising from your operation of the Hotel. Liquidated Damages Pre-opening: $100,000; Post-opening: the greater of (a) $100,000 or (b) the average of the monthly Royalty Fee, Marketing and Reservations Fee and RediRewards ® Preferred Members Program Fee required by the Franchise Agreement for the 36 months preceding termination (or if you have been operating the Hotel as a franchisee of TRC for less than 36 months, the average of the months you operated the Hotel as a franchisee of TRC before termination), multiplied by the lesser of (i) 36, or (ii) the number of months remaining in the term of the Franchise Agreement Within five days of termination or our request You must pay us liquidated damages if the Franchise Agreement is terminated prior to the expiration date, unless otherwise specified in the Franchise Agreement. Unauthorized Closure or Remodel Fee $25,000 Upon demand You must pay us this fee if you cease to operate the Hotel at full capacity and/or commence any unauthorized remodel or renovation of the Hotel prior to the expiration date of your Franchise Agreement. | 2026 FDD · PDF Page 22 |
| Distribution Listing Fees, Commissions and Rebates, low — 0% | as merchandise and gift cards on the RediRewards site. The fee is currently 4% but is subject to increase (maximum of 5%) on written notice from us. Distribution Listing Fees, Commissions and Rebates 0% to 25% of any applicable net booking Payable 20 days after the invoice date You must reimburse us or our supplier for the amount of travel agency commissions, online travel agency commissions affiliate commissions, processing fees, corporate rebates, distribution listing fees, and request for proposal program fees paid on your behalf to third parties for reservations at your Hotel; or similar fees to be used for the development support and maintenance of direct connectivity to third party distribution channels. If we institute a centralized billing program where participation is required by franchisees under our Standards, you must pay us the fees assessed for participation in the program | 2026 FDD · PDF Page 16 |
| Digital Performance Marketing Program current minimum — 3% of applicable Gross Room Revenues | erator. We do not represent or warrant that your Hotel’s performance will improve, and we are not liable for poor performance. Digital Performance Marketing Program Currently, the fee is no less than 3% of Gross Room Revenues for an applicable stay, but we have the right to increase the fee to no more than 15% of applicable Gross Room Revenues. Payable 20 days after the invoice date A fee on Gross Room Revenues from the Hotel stays that result from digital marketing tactics through paid search, metasearch, key words, banner display ads, Web lightboxes, and textual links. | 2026 FDD · PDF Page 24 |
| Opening on-site training fee, low — $4,500 | ee for such training in the amount of $1,000 to $1,600 per person. Additionally, a trainer will visit your Inn the week before or the week of your opening and provide additional training for a fee of $4,500 to $5,000, which will be due upon completion of the training. In the event the on-site training is rescheduled, any rebooking of travel expenses associated with the rescheduling will be charged back to you. None of the training fees are refundable under any circumstances. Reservation Platform / PMS You must use the Reservation Platform / PMS and use computer systems that support the Reservation Platform / PMS and otherwise meet our standards and specifications. You must sign the Reservation Platform Property Management Software Sublicense Agreement (Exhibit H) and pay us a software license fee for your use of the Reservation Platform / PMS in the amount of $15,000. The software licens | 2026 FDD · PDF Page 14 |
| Regional or annual conference nonattendance fee, low — $500 | you are responsible for all travel costs, meals, lodging and wages for all attendees of these conferences/meetings. The current fee for failure to attend a regional or an annual conference is between $500 and $2,500. RED Advantage Non-Completion Fee $500 per quarter for non- completion Upon demand We may charge a RED Advantage non-completion fee for not completing all RED Advantage courses within 90 | 2026 FDD · PDF Page 18 |
| Reservation Platform / PMS fee annual increase maximum — 5% | his surcharge. Reservation Platform / PMS Fee; Help Desk; Hardware and Software Support and Maintenance Currently $490 per month plus $3.85 per room, per month; fee may be increased annually by up to 5% Payable 20 days after the invoice date We provide these services through a combination of in-house IT resources and outside suppliers. See Items 8 and 11. Desktop Protection and Maintenance Fee $200 to $250 per device Annually This fee covers service related to the installation of anti-virus, patching and web filtering software as well as the monitoring and proactive maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days after the invoice date You must use the revenue management software | 2026 FDD · PDF Page 17 |
| Post-opening Liquidated Damages minimum alternative — $100,000 | TRC – 04/26 FDD 16 Type of Fee Amount Due Date Remarks time we must spend investigating the supplier and if we need to visit the supplier’s facilities. Indemnification Varies based on the circumstances Upon demand You must reimburse us for dealing with claims we defend and expenses we incur arising from your operation of the Hotel. Liquidated Damages Pre-opening: $100,000; Post-opening: the greater of (a) $100,000 or (b) the average of the monthly Royalty Fee, Marketing and Reservations Fee and RediRewards ® Preferred Members Program Fee required by the Franchise Agreement for the 36 months preceding termination (or if you have been operating the Hotel as a franchisee of TRC for less than 36 months, the average of the months you operated the Hotel as a franchisee of TRC before termination), multiplied by the lesser of (i) 36, or (ii) the number of months remaining in the term of the Franchise Agreement Within five days of termination or our request You must pay us liquidated damages if the Franchise Agreement is terminated prior to the expiration date, unless otherwise specified in the Franchise Agreement. Unauthorized Closure or Remodel Fee $25,000 Upon demand You must pay us this fee if you cease to operate the Hotel at full capacity and/or commence any unauthorized remodel or renovation of the Hotel prior to the expiration date of your Franchise Agreement. | 2026 FDD · PDF Page 22 |
| On-Site Quality first Audit Fee — $2,500 | erty improvement plan audits. Continued failure to meet our quality and guest satisfaction standards will result in an escalating fee for each additional time we complete an audit. The first audit is $2,500 and doubles annually up to $10,000 if your quality performance score is not brought up to the brand average or sub-brand quality performance score goal, whichever is lower. On-Site Quality Training Rescheduling Fee $500 per occurrence plus the cost of consumed, cancelled, or lost travel expenses Upon demand We may charge this fee if you do not comply with the scheduling of the On- Site Quality Training once those dates have been set by our trainers. Continuing Education $900 to $1,200 Upon demand We will require you or your employees to attend additional or refresher training programs hosted on the Red Roof Learning Management System as well as live Webinars. An example of such traini | 2026 FDD · PDF Page 19 |
| Optional RediCall fee per confirmed reservation — $6.00 | ng reservations When we or an agency invoice you The fee is for our consortia agency program that incurs fees based on consumption versus advance subscription fee. RediCall $1.55 to $1.75 per call or $6.00 per confirmed reservation, with a minimum of $75 per month Payable 20 days after the invoice date The optional RediCall program allows your Hotel to have a unique call center number posted on search engines, local business listings, and other internet websites or applications. The program includes a centralized auto attendant customized for each Hotel. Reservation calls will be handled by trained reservation agents and Front Desk calls will be forwarded to your Hotel. If your Hotel transfers reservation calls to the call center outside of the RediCall program, you may be billed up to $5.00 per call. You will sign the RediCall Agreement attached as Exhibit R if you elect to use the Redi | 2026 FDD · PDF Page 17 |
| Mobile App Booking Fee per net booking — $1.75 | et systems. The current fees are listed. These fees may change during the term of the franchise. Additional third party internet systems are offered for optional participation. Mobile App Booking Fee $1.75 per net booking Payable 20 days after the invoice date The Mobile App Booking Fee will be used for the development, operation and ongoing cost of mobile reservations Professional Photography Services $750 to $2,199 Payable 20 days after the invoice date You must have professional photographs of your Hotel taken regularly to accurately depict hotel rooms, common spaces, and amenities. The cost varies based on the number of photographs needed. You must use one of our approved photography studios. We will pass this payment through to the photography studios. Failure to Accommodate Group Booking Fee $250 Payable upon invoice You must pay this fee if you confirmed a group booking of ten or | 2026 FDD · PDF Page 16 |
| Initial Franchise Fee for hotels with up to 100 guest rooms — $30,000 | Application Fee When you submit an Application, you must pay us an application fee in the amount of $5,000. If we reject your Application, we will refund your application fee if we or our representatives have not visited your site or the area surrounding your site in connection with your Application or provided you with written architectural drawings or technical information. We do not offer refunds of the application fee under any other circumstances. Initial Franchise Fee You must pay a lump sum initial franchise fee when you sign the Franchise Agreement in the amount of $30,000 for hotels with up to 100 guest rooms. You must pay an additional $300 for each additional guest room. Once the initial franchise fee is paid, there are no refunds under any circumstances. This amount is in addition to the application fee. Cyber Liability Insurance We procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. You must pay for the first year of coverage prior to opening your Hotel, | 2026 FDD · PDF Page 13 |
| RediRewards Preferred Member Program — 4% of Gross Room Revenues from Preferred Members | Royalty 4.5% of Gross Room Revenues Payable 20 days after the invoice date See Note 2 for a definition of Gross Revenues Marketing and Reservation Fee 3% of Gross Room Revenues Payable 20 days after the invoice date The monthly Marketing and Reservation Fee may be used for the development and operation of the Reservation System and the Marketing Program. The fee is subject to increase (maximum of 5%). (See Item 11.) RediRewards® Preferred Member Program 4% of Gross Room Revenues received from RediRewards Preferred Members. Payable 20 days after the invoice date This Program provides members with express check-in, daily delivery of bottled water to the room, guaranteed late check-in, a discount on premium room rates at select locations and the opportunity for guests to earn points redeemable for free room nights and points redeemable for discounts at Red Roof Inns, HomeTowne Studios hotels and members of The Red Collection as | 2026 FDD · PDF Page 15 |
| Digital Marketing Search Engine Optimization and Hotel Localized Marketing annual fee — $750 | mendment to the Franchise Agreement to include the additional rooms. Digital Marketing Fee for Search Engine Optimization and Hotel Localized Marketing Initial Fee of $1,250, thereafter annual fee of $750 Payable on the date specified on the invoice We will create and maintain on an ongoing basis local listings with search engine optimized content focusing on the property experience to drive organic search traffic and direct hotel revenue. REDvenue Optimizer Program $525 to $1,195 Plus a quarterly bonus of up to $300 if your Hotel achieves certain targets Monthly Your participation in this program is generally optional unless your hotel operates as a dual branded hotel with one of our Affiliate’s hotel brands, in which case, this program is required. Participation requires a separate Revenue Management Agreement (Exhibit N). The REDvenue Optimizer Program provides you with the services o | 2026 FDD · PDF Page 24 |
| Insurance Procurement administrative fee maximum — $2,500 | nce) Upon demand Payable if you fail to procure and maintain the insurance we require. Insurance Procurement The premium price of any insurance we procure for you, plus an administrative fee of up to $2,500 Upon demand Payable only if you fail to procure insurance and we do it for you. We are not obligated to procure insurance for you. Public Securities Offering $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed offering, including legal and accounting fees Upon demand We limit our review to the subject of our relationship. This fee is in addition to the fees otherwise payable upon transfer. Cooperative Contribution A maximum of 1% of Gross Room Revenues If charged, same as Royalty Fee We do not currently have any approved advertising cooperatives. If such a cooperative is created and your Hotel is within the territory of | 2026 FDD · PDF Page 21 |
| Direct connect booking fee, low — $1.99 | d by franchisees under our Standards, you must pay us the fees assessed for participation in the program. Booking Fees $6.60 to $7.00 per GDS booking, $3.30 to $3.60 per third party internet booking, $1.99 to $2.25 per direct connect booking Payable 20 days after the invoice date All The Red Collection hotels are represented in all major GDS systems and select third party internet systems. The current fees are listed. These fees may change during the term of the franchise. Additional third party internet systems are offered for optional participation. Mobile App Booking Fee $1.75 per net booking Payable 20 days after the invoice date The Mobile App Booking Fee will be used for the development, operation and ongoing cost of mobile reservations Professional Photography Services $750 to $2,199 Payable 20 days after the invoice date You must have professional photographs of your Hotel taken | 2026 FDD · PDF Page 16 |
| Revenue Management Software System setup maximum — $250 | -virus, patching and web filtering software as well as the monitoring and proactive maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days after the invoice date You must use the revenue management software system that we designate, which integrates with the Reservation Platform / PMS that we license to you. The system provides revenue management, analytics, data retention, and price optimization features. You will pay us for this | 2026 FDD · PDF Page 17 |
| Marketing and Reservation Fee maximum — 5% | Royalty 4.5% of Gross Room Revenues Payable 20 days after the invoice date See Note 2 for a definition of Gross Revenues Marketing and Reservation Fee 3% of Gross Room Revenues Payable 20 days after the invoice date The monthly Marketing and Reservation Fee may be used for the development and operation of the Reservation System and the Marketing Program. The fee is subject to increase (maximum of 5%). (See Item 11.) RediRewards® Preferred Member Program 4% of Gross Room Revenues received from RediRewards Preferred Members. Payable 20 days after the invoice date This Program provides members with express check-in, daily delivery of bottled water to the room, guaranteed late check-in, a discount on premium room rates at select locations and the opportunity for guests to earn points redeemable for free room nights and points redeemable for discounts at Red Roof Inns, HomeTowne Studios hotels and members of The Red Collection as | 2026 FDD · PDF Page 15 |
| Optional RediCall minimum per month — $75 | e fee is for our consortia agency program that incurs fees based on consumption versus advance subscription fee. RediCall $1.55 to $1.75 per call or $6.00 per confirmed reservation, with a minimum of $75 per month Payable 20 days after the invoice date The optional RediCall program allows your Hotel to have a unique call center number posted on search engines, local business listings, and other internet websites or applications. The program includes a centralized auto attendant customized for each Hotel. Reservation calls will be handled by trained reservation agents and Front Desk calls will be forwarded to your Hotel. If your Hotel transfers reservation calls to the call center outside of the RediCall program, you may be billed up to $5.00 per call. You will sign the RediCall Agreement attached as Exhibit R if you elect to use the RediCall program. Credit Card Payment Surcharge 2.8% Pe | 2026 FDD · PDF Page 17 |
| Reservation Platform / PMS base monthly fee — $490 | Per transaction If you choose to make payments to us via credit card, we will assess this surcharge. Reservation Platform / PMS Fee; Help Desk; Hardware and Software Support and Maintenance Currently $490 per month plus $3.85 per room, per month; fee may be increased annually by up to 5% Payable 20 days after the invoice date We provide these services through a combination of in-house IT resources and outside suppliers. See Items 8 and 11. Desktop Protection and Maintenance Fee $200 to $250 per device Annually This fee covers service related to the installation of anti-virus, patching and web filtering software as well as the monitoring and proactive maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per mont | 2026 FDD · PDF Page 17 |
| Cyber Insurance premium, low — $550 | aximum rate permitted by law Upon demand Interest accrues on all overdue amounts from the date payment was due until such amount is paid. Cyber Insurance Premium price of the insurance (approximately $550 to $5,200 depending on the Gross Room Revenues of the Hotel) Payable annually 20 days after the invoice date We may procure cyber liability insurance on your behalf and you must reimburse us for our costs of obtaining the coverage for you. Insurance Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to $17,500 for each instance of noncompliance) Upon demand Payable if you fail to procure and maintain the insurance we require. Insurance Procurement The premium price of any insurance we procure for you, plus an administrative fee of up to $2,500 | 2026 FDD · PDF Page 21 |
| Distribution Listing Fees, Commissions and Rebates, high — 25% | chandise and gift cards on the RediRewards site. The fee is currently 4% but is subject to increase (maximum of 5%) on written notice from us. Distribution Listing Fees, Commissions and Rebates 0% to 25% of any applicable net booking Payable 20 days after the invoice date You must reimburse us or our supplier for the amount of travel agency commissions, online travel agency commissions affiliate commissions, processing fees, corporate rebates, distribution listing fees, and request for proposal program fees paid on your behalf to third parties for reservations at your Hotel; or similar fees to be used for the development support and maintenance of direct connectivity to third party distribution channels. If we institute a centralized billing program where participation is required by franchisees under our Standards, you must pay us the fees assessed for participation in the program. Book | 2026 FDD · PDF Page 16 |
| RED Advantage Training first two phases, low — $1,000 | under any circumstances. Training Fees Before your Inn opens, you or your General Manager must complete the first two phases of RED Advantage Training and pay a fee for such training in the amount of $1,000 to $1,250 and your owners must attend New Owner Orientation and pay a fee for such training in the amount of $1,000 to $1,600 per person. Additionally, a trainer will visit your Inn the week before or the week of your opening and provide additional training for a fee of $4,500 to $5,000, which will be due upon completion of the training. In the event the on-site training is rescheduled, any rebooking of travel expenses associated with the rescheduling will be charged back to you. None of the training fees are refundable under any circumstances. Reservation Platform / PMS You must use the Reservation Platform / PMS and use computer systems that support the Reservation Platform / PMS an | 2026 FDD · PDF Page 14 |
| Revenue Management Software System minimum monthly fee — $100 | ve maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days after the invoice date You must use the revenue management software system that we designate, which integrates with the Reservation Platform / PMS that we license to you. The system provides revenue management, analytics, data retention, and price optimization features. You will pay us for this | 2026 FDD · PDF Page 17 |
| Insurance Noncompliance total maximum per instance — $17,500 | Noncompliance Up to $2,500 for each first notice of noncompliance; up to $5,000 for each second notice of noncompliance; and up to $10,000 for each third notice of noncompliance (for a total of up to $17,500 for each instance of noncompliance) Upon demand Payable if you fail to procure and maintain the insurance we require. Insurance Procurement The premium price of any insurance we procure for you, plus an administrative fee of up to $2,500 Upon demand Payable only if you fail to procure insurance and we do it for you. We are not obligated to procure insurance for you. Public Securities Offering $10,000 or any greater amount needed to reimburse us for our reasonable costs and expenses of reviewing the proposed offering, including legal and accounting fees Upon demand We limit our review to the subject of our relationship. This fee is in addition to the fees otherwise payable upon transf | 2026 FDD · PDF Page 21 |
| Transfer Application Fee — $2,500 | lations cases to ensure reasonable resolution. You must also reimburse us for any payment or other consideration we may furnish the guest to reasonably resolve the complaint. Transfer Application Fee $2,500 Upon application to transfer your franchise We have the right to approve all transfers. We will evaluate your proposed transferee when we receive this fee. Transfer Fee $15,000 Upon the transfer of your Franchise Payable when the transaction closes; we will not recognize the transfer until this fee is paid. Reinstatement Fee Currently, $5,000 Upon reinstatement of your Franchise Payable in addition to all applicable amounts owed to restore your Franchise after termination or after removing the Hotel from the Reservation System. Renewal Fee 50% of the then-current initial franchise fee Upon renewal Payable upon approval of your renewal application. Audit Fee If audit finds underpayment | 2026 FDD · PDF Page 20 |
| Meetings and Conferences attendance fee, low — $800 | ompliance is proven; and (iii) you must reimburse us for any costs and expenses incurred by us in verifying your compliance and/or securing a vendor to assist you. Meetings and Conferences Currently, $800 to $3,500, plus expenses Upon demand You, your Manager or other approved executive, owner or employee may be required to attend our Annual Conference or Annual Brand Meeting and pay an attendance fee. We may conduct The Red Collection conference in conjunction with or as part of the annual conferences for the Red Roof Brands and HomeTowne Studios hotel systems. In addition to paying a fee for such Conference/Brand Meeting, you are responsible for your expenses and those of any of your employees that attend. We may charge a fee for attendance at regional conferences and brand meetings (which may be charged regardless of attendance) or a fee for your failure to appear at such conferences | 2026 FDD · PDF Page 18 |
| Digital Performance Marketing Program maximum — 15% of applicable Gross Room Revenues | poor performance. Digital Performance Marketing Program Currently, the fee is no less than 3% of Gross Room Revenues for an applicable stay, but we have the right to increase the fee to no more than 15% of applicable Gross Room Revenues. Payable 20 days after the invoice date A fee on Gross Room Revenues from the Hotel stays that result from digital marketing tactics through paid search, metasearch, key words, banner display ads, Web lightboxes, and textual links. | 2026 FDD · PDF Page 24 |
| Franchise Referral Credit cash payment — $5,000 | lection franchisee refers a prospective franchisee to us and that prospective franchisee ultimately purchases a franchise for a The Red Collection hotel, we currently (1) pay the referring franchisee $5,000 or (2) provide the referring franchisee with a quarter percentage point reduction in Royalty Fees for a period of up to one year (for a maximum value of $3,000). The referring franchisee must be current on all fees to us to be eligible for the Franchise Referral Credit. We may discontinue this practice or change the amount of the Franchise Referral Credit at any time without notice. | 2026 FDD · PDF Page 14 |
| Regional or annual conference nonattendance fee, high — $2,500 | esponsible for all travel costs, meals, lodging and wages for all attendees of these conferences/meetings. The current fee for failure to attend a regional or an annual conference is between $500 and $2,500. RED Advantage Non-Completion Fee $500 per quarter for non- completion Upon demand We may charge a RED Advantage non-completion fee for not completing all RED Advantage courses within 90 | 2026 FDD · PDF Page 18 |
| RediPromise Penalty Fee, low — $75 | ave 15 days from the date of expiration or termination to remove all non-high-rise signs and 30 days from the date of expiration or termination to remove all high-rise signs. RediPromise® Penalty Fee $75 to $100 Upon demand You must participate in the RediPromise Redroof.com Best Rate Guarantee Program, which ensures guests the best rate is always available at redroof.com. You must make available all rates and availability to the general public through our proprietary booking channels, such as redroof.com and Red Roof Central Reservations. You may set your own rates for distribution to online channels, as long as those rates are in conformity with the Brand Standard on Rates. If your Hotel violates the Brand Standard on Rates, you will be notified and the issue must be immediately corrected. We will assess the RediPromise Penalty fee for continued violations of the Brand Standard on Rate | 2026 FDD · PDF Page 23 |
| First-year Cyber Liability Insurance reimbursement, low — $550 | TRC – 04/26 FDD 8 which we estimate to be between approximately $550 to $5,200 depending on the projected Gross Room Revenues of the Hotel. These costs are subject to change as the insurers alter their premiums and are not refundable under any circumstances. Opening Package Within 60 days of opening the Hotel, you must use one of our approved photographers to conduct a full professional photo shoot for the Hotel in accordance with our Standards to generate photographs that can be used across all distribution channels. We will provide you with the photographs for your use (the “Opening Package”). You must pay us $2,500 to $5,000 upon receipt of our invoice for the Opening Package, which includes a professional photo shoot and training materials. We will p | 2026 FDD · PDF Page 14 |
| Marketing and Reservation Fee — 3% of Gross Room Revenues | Royalty 4.5% of Gross Room Revenues Payable 20 days after the invoice date See Note 2 for a definition of Gross Revenues Marketing and Reservation Fee 3% of Gross Room Revenues Payable 20 days after the invoice date The monthly Marketing and Reservation Fee may be used for the development and operation of the Reservation System and the Marketing Program. The fee is subject to increase (maximum of 5%). (See Item 11.) RediRewards® Preferred Member Program 4% of Gross Room Revenues received from RediRewards Preferred Members. Payable 20 days after the invoice date This Program provides members with express check-in, daily delivery of bottled water to the room, guaranteed late check-in, a discount on premium room rates at select locations and the opportunity for guests to earn points redeemable for free room nights and points redeemable for discounts at Red Roof Inns, HomeTowne Studios hotels and members of The Red Collection as | 2026 FDD · PDF Page 15 |
| Cooperative Contribution maximum — 1% of Gross Room Revenues | egal and accounting fees Upon demand We limit our review to the subject of our relationship. This fee is in addition to the fees otherwise payable upon transfer. Cooperative Contribution A maximum of 1% of Gross Room Revenues If charged, same as Royalty Fee We do not currently have any approved advertising cooperatives. If such a cooperative is created and your Hotel is within the territory of a cooperative, you will contribute to the cooperative. Supplier Testing Fee $1,000 to $2,500 Upon demand Payable only when you request that we approve an unapproved supplier. The amount of the fee will depend on the | 2026 FDD · PDF Page 21 |
| Desktop Protection and Maintenance annual fee per device, low — $200 | to 5% Payable 20 days after the invoice date We provide these services through a combination of in-house IT resources and outside suppliers. See Items 8 and 11. Desktop Protection and Maintenance Fee $200 to $250 per device Annually This fee covers service related to the installation of anti-virus, patching and web filtering software as well as the monitoring and proactive maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days after the invoice date You must use the revenue management software system that we designate, which integrates with the Reservation Platform / PMS that we license to you. The system provides revenue management, analytics, data retention, and price optimization feat | 2026 FDD · PDF Page 17 |
| Digital Marketing Search Engine Optimization and Hotel Localized Marketing initial fee — $1,250 | We will require you to sign an amendment to the Franchise Agreement to include the additional rooms. Digital Marketing Fee for Search Engine Optimization and Hotel Localized Marketing Initial Fee of $1,250, thereafter annual fee of $750 Payable on the date specified on the invoice We will create and maintain on an ongoing basis local listings with search engine optimized content focusing on the property experience to drive organic search traffic and direct hotel revenue. REDvenue Optimizer Program $525 to $1,195 Plus a quarterly bonus of up to $300 if your Hotel achieves certain targets Monthly Your participation in this program is generally optional unless your hotel operates as a dual branded hotel with one of our Affiliate’s hotel brands, in which case, this program is required. Participation requires a separate Revenue Management Agreement (Exhibit N). The REDvenue Optimizer Program | 2026 FDD · PDF Page 24 |
| Professional Photography Services, low — $750 | per net booking Payable 20 days after the invoice date The Mobile App Booking Fee will be used for the development, operation and ongoing cost of mobile reservations Professional Photography Services $750 to $2,199 Payable 20 days after the invoice date You must have professional photographs of your Hotel taken regularly to accurately depict hotel rooms, common spaces, and amenities. The cost varies based on the number of photographs needed. You must use one of our approved photography studios. We will pass this payment through to the photography studios. Failure to Accommodate Group Booking Fee $250 Payable upon invoice You must pay this fee if you confirmed a group booking of ten or more rooms (with confirmation number(s) or a signed group booking agreement) that your Hotel does not fulfill due to overbooking, | 2026 FDD · PDF Page 16 |
| Revenue Management Software System monthly fee — 0.3% of Gross Room Revenues received | d web filtering software as well as the monitoring and proactive maintenance of the computers at the front desk and back office. Revenue Management Software System Setup Fee: up to $250; Monthly Fee: 0.3% of Gross Room Revenues received; subject to a minimum of $100 per month and a maximum of $400 per month Payable 20 days after the invoice date You must use the revenue management software system that we designate, which integrates with the Reservation Platform / PMS that we license to you. The system provides revenue management, analytics, data retention, and price optimization features. You will pay us for this | 2026 FDD · PDF Page 17 |
| REDvenue Optimizer Program monthly fee, low — $525 | intain on an ongoing basis local listings with search engine optimized content focusing on the property experience to drive organic search traffic and direct hotel revenue. REDvenue Optimizer Program $525 to $1,195 Plus a quarterly bonus of up to $300 if your Hotel achieves certain targets Monthly Your participation in this program is generally optional unless your hotel operates as a dual branded hotel with one of our Affiliate’s hotel brands, in which case, this program is required. Participation requires a separate Revenue Management Agreement (Exhibit N). The REDvenue Optimizer Program provides you with the services of a Revenue Manager. Performance varies by Hotel, location, market and experience of the Operator. We do not represent or warrant that your Hotel’s performance will improve, and we are not liable for poor performance. Digital Performance Marketing Program Currently, the | 2026 FDD · PDF Page 24 |
| Guest Relations Intervention Fee per escalation — $150 | ownership change and the new majority owner attends the New Owner Orientation. Attendance is mandatory within six months of a property opening or transfer. Guest Relations Intervention Fee Currently, $150 per escalation Upon demand If we have to intervene to resolve a guest complaint, we will assess this fee, which we may modify at our discretion. You also must reimburse us for any payment or other consideration we may furnish the guest to resolve the complaint. Guest Relations Watchlist Currently, $195 per intervention Upon demand For properties ranking in the bottom 20% of all The Red Collection hotels for negative responses, we will review all guest relations cases to ensure reasonable resolution. You must also reimburse us for any payment or other consideration we may furnish the guest to reasonably resolve the complaint. Transfer Application Fee $2,500 Upon application to transfer y | 2026 FDD · PDF Page 20 |
| RediRewards Preferred Member Program current fee — 4% | TRC – 04/26 FDD 10 Type of Fee Amount Due Date Remarks well as merchandise and gift cards on the RediRewards site. The fee is currently 4% but is subject to increase (maximum of 5%) on written notice from us. Distribution Listing Fees, Commissions and Rebates 0% to 25% of any applicable net booking Payable 20 days after the invoice date You must reimburse us or our supplier for the amount of travel agency commissions, online travel agency commissions affiliate commissions, processing fees, corporate rebates, distribution listing fees, and request for proposal program fees paid on your behalf to third parties for reservations at your Hotel; or similar fees to be used for the development support and maintenance of direct connectivity to third party distribution channels. If we institute a centralized billing program where part | 2026 FDD · PDF Page 16 |
Some fees apply only to a specific event or service. These are not all monthly expenses.
SourcesDoes This Fit Your Budget?
See how the disclosed startup costs fit your cash, reserves, and financing plans.
Territory
SourcesThe Exclusive Territory may be as small as one or two blocks or as large as a small town.
2026 FDD · PDF Page 42 · Item 12 · View Source
Read The Disclosed Requirements
The franchisor will designate a geographic area around your Hotel that the franchisor will negotiate with you and that will be specified in the Franchise Agreement.
2026 FDD · PDF Page 42 · Item 12 · View Source
Read Source Excerpts
The Exclusive Territory may be as small as one or two blocks or as large as a small town.
Source NotesWe will designate a geographic area around your Hotel that we will negotiate with you and that will be specified in the Franchise Agreement (the “Exclusive Territory”).
A disclosed territory policy does not confirm that your preferred area is available. Ask the franchisor about the specific area you are considering.
Inside The FDD
SourcesPlain-language summaries of the available FDD information. Each summary links to its source, with original excerpts available to review.
Sources
The Franopolis report provides the source research. FDD page references identify the supplied excerpts when available.
07Estimated Startup Investment
The FDD estimates a total startup investment of $222,875 to $1,611,250. Review the listed costs and any conditions before setting your own startup budget.
2026 FDD · PDF Page 27 · Item 7 · View Source
Read Source Excerpts
Source NotesAs Arranged As Incurred Vendors & Employees TOTAL (Note 14) $222,875 $1,611,250
12Territory
The Exclusive Territory may be as small as one or two blocks or as large as a small town.
2026 FDD · PDF Page 42 · Item 12 · View Source
The franchisor will designate a geographic area around your Hotel that the franchisor will negotiate with you and that will be specified in the Franchise Agreement.
2026 FDD · PDF Page 42 · Item 12 · View Source
Read Source Excerpts
The Exclusive Territory may be as small as one or two blocks or as large as a small town.
Source NotesWe will designate a geographic area around your Hotel that we will negotiate with you and that will be specified in the Franchise Agreement (the “Exclusive Territory”).
19Reported Business Results
The franchisor does not provide claims about future franchisee results or past results of its locations, and does not authorize its staff to make them.
2026 FDD · PDF Page 49 · Item 19 · View Source
Read Source Excerpts
Source NotesWe do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing.
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