How to Finance a Red Carpet Inn Franchise: Economy Motel Brand
By Chris Cornella
A Red Carpet Inn franchise loan is really a hotel loan with a light franchise layer on top. The brand is a value-oriented flag for economy and mid-level properties, and its franchisor charges flat monthly fees per room instead of a percentage of revenue. For a buyer or an owner converting an independent motel, the property, its condition and its cash flow drive the financing, while the flat fee structure shapes how a lender models expenses.
Below: the brand’s published fees, what its SBA Franchise Directory notes mean and which loan structures fit acquisitions, conversions and refinances.
US Professional Funding is not affiliated with, sponsored by or endorsed by Red Carpet Inn or its franchisor, Hospitality International, Inc.; the names are used only to describe the business. Figures from the franchisor’s disclosure document and fee materials can change, loan programs and terms vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice; review the current Franchise Disclosure Document (FDD) and franchise agreement with a franchise attorney and an accountant.
Red Carpet Inn Franchise Loan at a Glance
- Brand family: Red Carpet Inn, Red Carpet Suites and Red Carpet Inn & Suites, which the franchisor describes as part of the lodging industry since 1968.
- Property profile: limited- and full-service hotels in the economy to mid-level price ranges, with owners setting their own room rates.
- Franchisor: Hospitality International, Inc., based in Tucker, Georgia, which franchises five hotel brands.
- Application fee: $1,995, according to the franchisor’s 2026 fee summary.
- Initial franchise fee: the 2026 fee summary lists $7,500 to $15,000 depending on the brand; confirm the Red Carpet amount in the FDD.
- Royalty and marketing: combined at $40 per room per month, with a combined monthly minimum of $750.
- Education and meeting fee: $35 per hotel per month.
- SBA Franchise Directory: listed as Red Carpet Inn/Red Carpet Suites/Red Carpet Inn & Suites (code S1411), with notes on management agreements and lien position.
What Is Red Carpet Inn?
Red Carpet Inn is a long-running economy hotel brand franchised by Hospitality International, Inc. The franchisor positions it as a value-oriented franchise for owners who want to keep more of what their hotel earns and control their own rates. Properties range from limited-service roadside hotels to full-service facilities, priced from economy to mid-level, and the brand name can carry an Inn, Suites or Inn & Suites designation.
What owners get. The franchisor highlights customized support, its reservation technology and distribution, and reasonable brand standards that let owners respond to local market demand.
Why lenders view it the way they do. Lenders see an economy flag with low franchise costs, which can help a small hotel’s margins. They also know that economy hotels depend heavily on location, condition and management, and that a lighter brand gives less of a demand boost than a large national chain. Underwriting therefore rests on the property’s own history and the owner’s ability to run it. Our article on branded vs. independent hotels explains how lenders weigh a flag.
Red Carpet Inn Franchise Costs
Application and initial franchise fee. The 2026 fee summary lists a $1,995 application fee for each brand and initial franchise fees from $7,500 to $15,000 across the franchisor’s brands. Item 5 of the FDD confirms the amount for a Red Carpet property. These fees are minor compared with the cost of the hotel itself.
The hotel. Most Red Carpet owners buy an existing hotel or flag one they already own. The purchase price, appraisal, property condition report and environmental review determine how much a lender will advance.
Conversion and upgrades. Joining the brand can involve new signage, room and lobby updates, technology connections and brand-standard items. Get the franchisor’s list of required work in writing before closing so it can be built into the loan. See our article on financing a hotel PIP.
Technology. The fee summary lists a one-time property management system connectivity setup fee of $195 and a monthly maintenance fee of $39. It notes that your property management system provider may charge its own setup and monthly fees.
Working capital. Plan reserves for payroll, utilities, insurance, taxes and debt service during the transition and any slow season.
Total investment. Item 7 of the current FDD gives the franchisor’s estimate. For a conversion or purchase, expect these categories:
- Application fee and initial franchise fee
- Hotel purchase price or existing property value
- Exterior signage and branding
- Guest room, lobby and exterior upgrades
- Furniture, fixtures and equipment (FF&E)
- Property management system setup and connectivity
- Training and travel
- Insurance, licenses and permits
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Royalty and marketing. The 2026 fee summary combines royalty and marketing at $40 per room per month, and the franchisor’s fee page sets a $750 monthly minimum for the two combined. For a very small hotel, the minimum may be the amount you actually pay.
Education and meeting fee. $35 per hotel per month.
Reservation fees. The fee summary lists per-reservation charges: $2.20 for bookings through certain large online travel agencies (whose own commissions are separate), $3.50 for other direct-connect channels, $5.50 for call center bookings, $4.90 for the brand’s online booking engine and $12.75 for global distribution system bookings.
Fee changes. The franchisor says its fees are reviewed annually and may change with 30 days’ written notice.
How lenders factor them in. Because the fees are flat rather than tied to revenue, they stay the same in a weak month. A lender adds them to fixed operating costs, layers in reservation fees based on the hotel’s booking mix and tests whether net operating income covers debt service with a cushion. Many lenders also run a scenario with higher fees, since the franchisor can change them.
Franchisor Requirements for New Owners
The franchisor’s published pages do not list minimum net worth or liquidity requirements. In practice, approval centers on the property and the owner:
- A hotel that fits the brand’s economy to mid-level positioning
- Willingness to complete required signage and brand-standard work
- Hotel operating experience or a qualified manager
- Liquidity for the down payment, upgrades and reserves
The approval process. Owners typically speak with one of the franchisor’s regional franchise development directors, submit an application with the fee, receive and review the FDD, pass a property review and sign the franchise agreement. Line up your Red Carpet Inn franchise loan so that closing and brand approval happen together.
Ways to Own a Red Carpet Inn
Converting a hotel you already own. An independent owner joins the brand to gain reservation distribution and support. The financing need is usually signage, upgrades and working capital, often funded through a refinance. Read about conversion franchise financing.
Buying a hotel and flagging it at closing. A buyer acquires an independent motel and signs a Red Carpet franchise agreement at the same time, with one loan covering both the purchase and conversion. Our page on hotel and motel acquisition financing covers this structure.
Buying an existing Red Carpet property. The buyer applies for a new franchise or a transfer, and the lender underwrites the hotel’s actual operating results.
Financing Options for a Red Carpet Inn Franchise
SBA 7(a) loans. An SBA 7(a) loan can combine the hotel purchase, upgrades, FF&E and working capital in one loan for an owner-operator.
SBA 504 loans. When the hotel’s real estate is the main asset, an SBA 504 loan can provide long-term, fixed-asset financing for buying, expanding or renovating the property.
Conventional loans. Owners with hotel experience and strong equity may choose a conventional business loan, especially for refinancing or adding properties.
FF&E and equipment financing. Beds, case goods, televisions, room air conditioners, laundry equipment and the property management system can be financed separately when replaced.
Working capital and lines of credit. Roadside and leisure hotels can see uneven demand by season. A line of credit can cover payroll and utilities through slow stretches. See our hotel working capital options.
Seller financing. A seller may carry part of the price. A seller note is typically subordinate to the senior loan, and SBA rules may limit its terms.
SBA Loans for Red Carpet Inn Franchisees
SBA loans are made by participating lenders with partial SBA backing. The SBA Franchise Directory lists brands whose franchise documents have been reviewed for SBA eligibility, and a listing does not approve any borrower. Our article on SBA loans for hotels covers the basics.
The brand’s listing. Red Carpet Inn/Red Carpet Suites/Red Carpet Inn & Suites appears under code S1411, with two notes:
- Management agreements: if the owner also operates under a management agreement with a third party, the lender must review that agreement under SBA rules to determine whether the owner and the management company are affiliated. The owner is not eligible if the management company is, or is affiliated with, the franchisor.
- Lien position: the lender must obtain the correct lien position on all collateral as SBA rules require.
What the notes mean. If you plan to hire a hotel management company, share that contract with your lender early; the franchisor itself cannot manage the hotel on an SBA-backed deal. The lien note reminds lenders to secure the required lien priority on the hotel and other collateral, which matters when a seller note or existing debt is involved.
Program size. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
How Lenders Evaluate a Red Carpet Inn Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and expect a personal guarantee.
Net worth and liquidity. Lenders want a documented down payment and reserves after closing. See our article on hotel loan requirements.
Hotel experience. Prior hotel ownership or management carries real weight. First-time owners can strengthen a request with a qualified general manager.
Business plan and projections. Build projections from the hotel’s room count, occupancy and average daily rate history, then subtract the flat per-room fees, the education fee, reservation fees and any online travel agency commissions.
The FDD and franchise agreement. Lenders review the term, termination and transfer rules in Item 17, any franchisor financing in Item 10 and whether Item 19 includes financial performance representations. Read Items 3 and 4 as part of your own due diligence.
Property condition and real estate. Expect an appraisal, a property condition report and environmental review. Deferred maintenance can reduce the loan amount or require repair reserves.
Historical financials. For an acquisition, provide several years of statements, tax returns and occupancy reports.
FF&E and Property Upgrades
Economy hotels wear quickly. Mattresses, carpet, wall coverings, bathroom fixtures and HVAC units have limited lives, and a buyer should plan when each will need replacement. The franchisor describes reasonable standards, but signage and any required upgrades still belong in the budget.
Multi-Unit Growth
Once a first hotel is stable, owners often add a second property. Lenders then underwrite both hotels’ combined cash flow and the owner’s track record. Because the franchisor offers several brands, owners can choose the flag that fits each property; confirm fees for each in the FDD.
Real-World Scenarios
A first-time hotel buyer. A buyer with management experience acquires an independent motel near a highway and converts it to Red Carpet Inn. An SBA 7(a) loan covers the purchase, signage and working capital, and the buyer hires an experienced manager.
A buyer of an existing Red Carpet property. A buyer purchases a flagged hotel and applies for a transfer. The lender underwrites actual results, and the seller carries a subordinated note.
An owner using a management company. An investor hires a third-party manager. The lender reviews the management agreement for affiliation under SBA rules before approval.
Common Mistakes to Avoid
- Forgetting the $750 monthly minimum when modeling fees for a small hotel
- Leaving reservation fees and online travel commissions out of projections
- Skipping the property condition report on an older building
- Closing before getting required brand upgrades in writing
- Sharing a management agreement with the lender too late
- Keeping too little working capital for slow months
For more pitfalls, read hotel loan mistakes to avoid.
Next Steps to Finance Your Red Carpet Inn Franchise
Step 1: Request the FDD and fee schedule. Review Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Evaluate the property. Gather the hotel’s financials, occupancy history and condition report.
Step 3: Get the brand’s required work in writing. Price signage, upgrades and technology connections.
Step 4: Estimate payments. Our SBA loan calculator gives early estimates for planning only, not an offer or approval.
Step 5: Prepare your loan package. Include tax returns, a personal financial statement, projections and any management agreement.
Step 6: Apply and coordinate approvals. Align loan closing with the franchisor’s approval and agreement signing.
Red Carpet Inn Franchise Loan FAQs
How much does a Red Carpet Inn franchise cost?
The franchise fees are small: a $1,995 application fee and an initial franchise fee in the $7,500 to $15,000 range listed across the franchisor’s brands. The hotel itself is the main cost; see Item 7 of the FDD.
What are the Red Carpet Inn royalty and marketing fees?
The 2026 fee summary combines them at $40 per room per month, with a $750 monthly minimum, plus a $35 monthly education and meeting fee.
Are the fees a percentage of revenue?
No. The franchisor describes its fees as flat rather than a percentage of hotel revenue.
Can I get an SBA loan for a Red Carpet Inn?
Yes. The brand is listed on the SBA Franchise Directory under code S1411, subject to notes on management agreements and lien position.
Can I convert my independent motel?
Yes, conversions are a main path into the brand. Financing can cover signage, upgrades and working capital.
Can a first-time hotel owner get a Red Carpet Inn franchise loan?
Yes, if the property and plan are sound. Lenders often look for an experienced manager to offset limited ownership history.
Can I hire a management company?
Yes, but for an SBA loan the lender must review the agreement for affiliation, and the franchisor cannot be the manager.
Does the franchisor offer financing?
Check Item 10 of the current FDD for any financing the franchisor offers.
Can the fees change?
Yes. The franchisor reviews fees annually and may change them with 30 days’ written notice.
Final Thoughts
A Red Carpet Inn franchise loan succeeds or fails on the hotel itself. Low flat fees can help a small property’s margins, but buyers still need a careful look at condition, cash flow and reserves, plus early attention to the SBA notes on management agreements and lien position.
US Professional Funding helps hotel owners and buyers finance acquisitions, conversions, renovations and working capital. Learn more about our franchise financing and hotel and motel financing solutions.
