Buying a Red Roof Inn franchise: SBA acquisition loan data

What this tells a buyer

• Price range to expect. Loan size tracks purchase price. Half of Red Roof Inn resale loans landed between $2,120,500 and $3,488,500.
• Lender experience exists. GBank alone has financed 26 Red Roof Inn resales.
• Guaranty. The SBA guaranteed 77% of the dollars lent here.
• What the file leaves out. The SBA file does not record franchisor transfer terms or fees.

How Red Roof Inn compares

The median for Red Roof Inn resale loans is $2,666,000, in line with the $2,621,250 median for hotels and motels and well above the $645,250 median for all SBA-financed acquisitions nationally.

The middle half runs $2,120,500 to $3,488,500, against $283,000 to $1,465,000 nationally; the median term is 25 years, longer than the national median of 10 years; the average initial rate is 6.85%, below the 7.76% national average.

None of the seasoned loans were charged off, against 0.8% for hotels and motels and 3.5% for all acquisition loans.

Loan size distribution

Most Red Roof Inn resale loans (97%) were $1M or more, and the largest single band is $2M and over at 78%, against 17% of all acquisition loans.

Bands are fixed dollar ranges chosen for comparison. They are not SBA program limits.

Lender concentration

GBank made 25% of Red Roof Inn resale loans, and the top three lenders together made 44%. 11 of the 39 lenders involved made three or more. Repeat experience is spread across many banks. That is a rough guide to how many banks have seen this kind of deal before.

Recent activity

In FY2025 and FY2026 combined, 14 Red Roof Inn resale loans were approved. That is 8% more than the 13 approved in FY2023 and FY2024. The median was $2,975,000, slightly above the $2,666,000 median across all years.

Financing a Red Roof Inn resale: what lenders financed

The median SBA 7(a) loan for a Red Roof Inn resale was $2,666,000 across 103 loans (FY2018 to FY2026). GBank, First Western SBLC, LLC d/b/a Peachtree Group and The Huntington National Bank have financed the most Red Roof Inn resales. Of 64 seasoned loans (FY2018 to FY2021), none were charged off, against the 3.5% average for all SBA acquisition loans.

Red Roof Inn acquisition loans by year

How often do these acquisition loans fail?

Of the 64 Red Roof Inn acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), none have been charged off by the SBA. 32 have already been paid in full.

For comparison, Red Roof Inn has none charged off, against the 3.5% average across all SBA 7(a) acquisition loans in the same cohort. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.

"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.

How lenders classify Red Roof Inn

Lenders code each loan to a NAICS industry. For Red Roof Inn the codes used were:

Related

• All Hotels (except Casino Hotels) and Motels acquisitions
• Georgia acquisitions
• Ohio acquisitions
• North Carolina acquisitions
• GBank
• First Western SBLC, LLC d/b/a Peachtree Group
• The Huntington National Bank
• All franchise brands

Brand name as recorded by lenders in the SBA file: "Red Roof Inn" (franchise code S1414). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.