How to Finance a Comfort Inn Franchise: Fees, PIPs and SBA Rules
By Anthony Cornella
A Comfort Inn franchise loan finances two things at once: a piece of commercial real estate and a lodging business that sells its inventory one night at a time.
This article explains how the Comfort brand family is structured, what the franchisor’s public disclosures say about fees and agreement terms, how property improvement plans and prototype design affect a budget, how the brand’s SBA Franchise Directory listing works, and how buyers typically finance a new build, a conversion or the purchase of an existing Comfort hotel.
US Professional Funding is not affiliated with, sponsored by or endorsed by Comfort Inn, Comfort Suites or Choice Hotels International; the name is used only to describe the business. Figures from the franchisor’s disclosure document and public materials can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Comfort Inn Franchise Loan at a Glance
- Franchisor: Choice Hotels International, which describes Comfort as the flagship, upper midscale brand in its portfolio.
- Brand family: Comfort Inn, Comfort Inn & Suites and Comfort Suites, all marketed together as the Comfort brand.
- System size: 1,652 Comfort hotels with 128,836 rooms in the U.S., and 2,141 hotels worldwide, as of December 31, 2025, according to the company’s annual report.
- Royalty: the company’s annual report says royalties under its U.S. franchise agreements typically range from 5% to 6% of gross room revenues.
- Marketing and reservation fees: typically 3% to 4% of gross room revenues, per the same report.
- Agreement term: U.S. franchise agreements generally run 10 to 30 years.
- Initial fee and total investment: set out in Items 5 and 7 of the current Comfort FDD; we could not verify a current figure, so request the FDD before budgeting.
- SBA Franchise Directory: listed as Comfort Inn, Comfort Inn & Suites & Comfort Suites (identifier S0410), with a note about third-party management agreements.
What Is Comfort Inn?
Comfort is the flagship brand of Choice Hotels International, a company that says it launched the country’s first hotel chain in 1941. The Comfort brand celebrated its 40th anniversary in 2021, and the franchisor describes it as the largest 100% smoke-free hotel brand in North America. Comfort hotels offer a complimentary hot breakfast, free Wi-Fi and, depending on the property, a fitness center or pool, a business center and meeting space.
Three names, one brand. Comfort Inn properties are typically limited-service hotels with standard guest rooms. Comfort Inn & Suites mixes standard rooms with suites. Comfort Suites properties are built around larger suite-style rooms. All three share the brand’s standards, reservation system and loyalty program, and Choice markets them together as the Comfort brand family.
Design and prototype. In 2021 Choice unveiled the Comfort Rise & Shine prototype, built around a smaller footprint, an open lobby with a fireplace, a flex room that converts between breakfast, meeting and event space, and updated guest rooms. The first new-construction Rise & Shine hotel, a 56-room Comfort Inn & Suites in Mountain Grove, Missouri, opened in 2023. In March 2025 the company introduced a refreshed prototype that it says adds three keys within the existing footprint, cuts the number of stockkeeping units in the furniture, fixtures and equipment (FF&E) package by an estimated 30 percent, and achieves a 10 to 15 percent reduction in construction costs. The company also reported that the Rise & Shine design had been adopted in more than 140 properties, with an average 16 percent cost optimization on its FF&E package.
Why lenders view Comfort deals the way they do. A long-established, widely recognized flag with a large national footprint generally gives lenders comfort about demand generation and resale value. Choice says the Comfort brand has 90 percent average brand recognition. Lenders still underwrite each hotel on its own location, occupancy, condition and management.
Comfort Inn Franchise Costs
Initial franchise fee. The initial or affiliation fee for a Comfort hotel is disclosed in Item 5 of the current FDD and is typically tied to the hotel’s room count. Choice’s annual report notes that the company may discount fees, including the initial franchise fee, as part of its development strategy. Confirm the current fee for your room count and project type in the FDD.
Land, site work and construction. For a new Comfort hotel, land, site preparation, construction and soft costs such as architecture, engineering, permits and impact fees make up the largest share of the budget. The refreshed prototype is designed to reduce construction costs and the land footprint required, but actual costs depend heavily on the market, labor and materials prices and the number of floors and keys.
Furniture, fixtures and equipment. FF&E covers guest room casegoods, beds and soft goods, lobby and breakfast area furniture, fitness equipment, laundry equipment, televisions and in-room technology. Choice reports that its streamlined FF&E package reduces the number of items owners have to order, which can shorten procurement and simplify budgeting.
Opening costs and working capital. Pre-opening payroll and training, opening supplies (linens, breakfast smallwares, amenities), insurance deposits, licenses and a reserve for the ramp-up period before occupancy stabilizes all belong in the budget.
Total investment. Item 7 of the Comfort FDD states the estimated initial investment for a new-construction hotel, with assumptions about room count and land, which is often shown separately because it varies so widely. Lenders compare that table with contractor bids and the appraisal. Hotel Item 7 tables typically cover:
- Initial franchise or affiliation fee
- Land acquisition or ground lease costs
- Site work, building construction and contractor fees
- Architecture, engineering, permits and impact fees
- Furniture, fixtures and equipment
- Operating supplies, opening inventory and signage
- Computer systems, property management system and other technology
- Pre-opening training, travel and opening expenses
- Insurance, deposits and licenses
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Royalty. Choice’s annual report states that royalty fees under its U.S. franchise agreements typically range from 5% to 6% of gross room revenues. It also notes that the company may discount royalties in the early years of an agreement as an acquisition strategy, so the rate in a new agreement can step up over time. Your FDD and franchise agreement will set the exact schedule for your hotel.
Marketing and reservation fees. The same report says marketing and reservation fees typically range from 3% to 4% of gross room revenues and fund system-wide marketing and central reservation activities. Owners may also pay transaction-based fees for certain reservation channels and loyalty program costs; the FDD’s Item 6 lists them.
Brand standards and property improvement plans. Choice says it maintains quality standards for all its brands and that hotels may be required to complete property improvement plans (PIPs) at contractual windows. A PIP can require new soft goods, casegoods, bathroom renovations, technology or exterior work, and it is often the single largest capital item an owner faces after opening. Our article on financing brand-required renovations covers how owners pay for them.
How lenders factor these costs in. Because royalty and marketing fees are charged on gross room revenue, a meaningful share of every room night is committed before payroll, utilities or debt service. Lenders typically deduct franchise fees, a management fee (even for self-managed hotels) and an FF&E reserve before testing debt coverage. When a franchise agreement includes discounted early-year fees, lenders usually underwrite the full rate the hotel will pay once the discount ends.
Franchisor Requirements for New Owners
Choice does not publish a single minimum net worth or liquidity figure for Comfort developers on the materials we could verify. Approval depends on the project and the owner: the brand generally weighs financial capacity to complete the project or PIP, hotel experience or a qualified management company, and the site or property condition. Its annual report says development opportunities are typically offered to existing franchisees, hotel and multifamily developers, independent hotel owners, owners leaving other brands and non-hotel franchisees, and that sales managers place each prospective hotel in the brand that fits its physical characteristics, expected performance and amenities.
The approval process. A developer or buyer submits an application for a specific property, Choice reviews the site or hotel, and, for a conversion or change of ownership, the brand typically inspects the property and issues a PIP. Only after the application is approved and the franchise agreement is signed can most lenders close.
Ways to Own a Comfort Inn
Building a new Comfort hotel. Ground-up development is the most capital-intensive route. The owner finances land, construction, FF&E and a ramp-up reserve, and the lender relies on a feasibility study, appraisal and projections rather than operating history. Choice has said a large share of Comfort’s pipeline has historically been new construction. See our hotel start-up financing for how we approach new builds.
Converting an existing hotel to Comfort. An owner of an independent hotel or a hotel leaving another brand can apply to convert. Conversions usually involve a PIP to bring the property to Comfort standards, new signage and technology, and sometimes a refinance of existing debt. The lender looks at the hotel’s historical performance and the expected effect of the new flag.
Buying an existing Comfort hotel. Many owners enter by purchasing a hotel that already flies the flag. The buyer typically applies for a new franchise agreement or a transfer, and a change of ownership often triggers a PIP. Lenders can underwrite actual results, which makes resale financing more predictable than new construction. Our hotel and motel acquisition financing page explains the process.
Financing Options for a Comfort Inn Franchise
SBA 7(a) loans. Because the Comfort brand is listed on the SBA Franchise Directory, an SBA 7(a) loan can finance the purchase of a Comfort hotel, including real estate, FF&E, PIP work and working capital, when the borrower and project qualify. The 7(a) program is flexible about use of proceeds, which helps when a single loan must cover both the purchase and a renovation.
SBA 504 loans. Hotels are a natural fit for the SBA 504 program, which finances owner-occupied real estate and long-lived fixed assets with a senior lender and a certified development company sharing the project. A 504 structure can work for new construction, the purchase of an existing hotel or a major renovation, though it is less flexible for working capital.
Conventional term and construction loans. Larger hotels, experienced owners with several properties and projects that exceed SBA limits often use a conventional business loan. New builds may start with a construction loan that converts to permanent financing once the hotel is open and stabilized.
Equipment and FF&E financing. Owners can finance guest room furniture, mattresses, televisions, laundry machines, fitness equipment, breakfast area equipment and property technology separately, especially for a PIP or a soft-goods refresh between major renovations.
Working capital and lines of credit. Seasonal swings, fixed payroll and large tax and insurance bills make a line of credit useful after closing or during a new hotel’s ramp-up. Learn more about hotel working capital and lines of credit.
Seller financing on resales. In some sales, a seller may carry part of the price. Any seller note would need to be acceptable to the senior lender and is typically subordinate to it, and SBA rules may limit how a seller note is structured or counted.
Franchisor development support. Choice’s annual report says the company may offer discounted fees, franchise agreement acquisition cost payments and, under a separate program, investment, financing and guaranty support to qualified franchisees. Any such support is negotiated project by project and will appear in your franchise agreement and FDD (Item 10 covers franchisor financing). Lenders review these arrangements carefully, because incentive payments are often tied to the hotel staying in the system, and early termination can trigger repayment or liquidated damages.
SBA Loans for Comfort Inn Franchisees
SBA lending to franchisees runs through the SBA Franchise Directory, a list of brands whose franchise agreements have been reviewed for SBA eligibility. SBA lenders generally require a franchise brand to appear on the directory before making an SBA-guaranteed loan to one of its franchisees. A listing clears the franchise relationship for SBA review; it does not approve any borrower or project. Our article on SBA 7(a) and 504 loans for hotel acquisitions compares the two programs in more detail.
Comfort on the SBA Franchise Directory. The brand is listed as Comfort Inn, Comfort Inn & Suites & Comfort Suites, with identifier S0410. For a Comfort Inn franchise loan backed by the SBA, the lender will confirm this listing and the version of the franchise agreement you sign.
What the directory note means in plain English. The listing carries a note about third-party management. If the hotel will be run by a management company under a management agreement, the SBA lender (or the development company in a 504 loan) must review that agreement under SBA rules to decide whether the owner and the management company are affiliated. The applicant is not eligible if the management company is the franchisor or is affiliated with the franchisor. In practice:
- An owner-operator who manages the hotel personally is not affected by this note.
- An owner who hires an independent management company should expect the lender to read the management agreement closely, including control, fees and termination rights.
- A management arrangement with the franchisor or its affiliates would make the project ineligible for SBA financing.
SBA application tips. The SBA 7(a) program maximum is currently $5 million, though program rules can change, so larger hotels often combine programs or use a 504 structure. Submit the FDD, the signed or proposed franchise agreement, the PIP, any management agreement, a feasibility study or historical financials, and a personal financial statement with your application.
How Lenders Evaluate a Comfort Inn Deal
Personal credit and financial history. Lenders review personal credit, tax returns and a personal financial statement for each significant owner, and they typically require personal guarantees.
Net worth and liquidity. Hotel loans are large relative to most small business loans, so lenders look closely at the equity injection and the reserves left after closing. Reserves matter more for hotels than for many franchises because a PIP overrun, a slow season or a major mechanical repair can arrive in the first year.
Hotel experience and management. Prior hotel ownership or management is one of the strongest factors in approval. First-time owners can strengthen a request with a general manager who has run a branded hotel or with a qualified management company, subject to the directory note above. See our article for first-time hotel buyers.
Business plan and projections. Projections should build from occupancy and average daily rate (ADR) for the hotel’s competitive set, then deduct the Comfort royalty and marketing fees at the rates in your agreement, management fees, payroll, utilities, property taxes, insurance and an FF&E reserve. For a new build, model the ramp-up honestly.
The FDD and franchise agreement. Lenders focus on the agreement’s term, early termination rights, liquidated damages, PIP obligations, transfer provisions and any incentive repayment terms. Choice’s annual report notes that either party to its standard U.S. agreement can terminate early under certain circumstances, such as at designated anniversaries, which a lender will want to understand before committing to a long amortization.
Site, real estate and condition. Expect a going-concern appraisal, an environmental report and, for an existing hotel, a property condition assessment. Our article on how lenders underwrite occupancy, ADR and cash flow explains the metrics behind those reports.
Historical financials for resales. For an existing hotel, provide several years of profit and loss statements, monthly operating reports and tax returns, along with brand quality inspection results. Lenders compare the reports with tax returns and check for deferred maintenance.
PIPs, Prototypes and FF&E: The Comfort Capital Cycle
Every branded hotel lives on a renovation cycle, and for Comfort owners that cycle shapes long-term financing as much as the original loan does.
Change-of-ownership PIPs. When a Comfort hotel is sold, the buyer usually receives a PIP as a condition of approval. The cost can range from a soft-goods refresh to a full renovation of bathrooms, corridors and the lobby. Get the PIP before you set your purchase price, and make sure the lender’s loan amount and timeline include it.
The brand refresh. Choice has described a multiyear, $2.5 billion refresh of Comfort hotels that updated guest rooms, public spaces, logo and signage. Ask whether an older hotel meets current design standards, since one that does not may face a larger PIP.
Multi-Unit Growth and Development Agreements
Comfort owners often grow from one hotel to two or three in nearby markets, which lets them share management, maintenance staff and purchasing.
Financing a second or third hotel. Once an owner has operating history, lenders can underwrite the existing hotel’s cash flow alongside the new project and may accept equity built up in the first property as part of the next injection. Each hotel generally carries its own franchise agreement, PIP schedule and loan, so tracking maturities, guarantees and renovation windows across properties becomes important.
Development pipelines. Choice reported 122 Comfort hotels in its pipeline in March 2025. Developers who commit to several projects should match each project’s financing to its construction schedule and keep enough liquidity to absorb delays at one site without stalling the others.
Real-World Scenarios
A first-time owner buying a Comfort Inn & Suites. A buyer with a background in multi-family property management buys an existing Comfort Inn & Suites from a retiring owner. The brand approves the transfer and issues a change-of-ownership PIP. The buyer uses an SBA 7(a) loan that covers the purchase price and the PIP, hires an experienced general manager, and keeps a working capital reserve for the renovation period, when some rooms will be out of service.
A conversion of an independent hotel. An owner of an independent hotel near an interstate converts to Comfort to gain reservation and loyalty support. The owner refinances existing debt and adds PIP funding, and the lender underwrites the hotel’s history plus a conservative view of the improvement the new flag may bring.
A new-construction Comfort Suites. A developer with two existing hotels builds a new Comfort Suites using the current prototype. A 504 structure funds land, construction and long-lived FF&E, while a separate line of credit covers pre-opening payroll and the ramp-up period.
Common Mistakes to Avoid
- Setting a purchase price before seeing the change-of-ownership PIP
- Underwriting on introductory royalty rates instead of the full rate in later years
- Ignoring early termination rights, liquidated damages and incentive repayment terms in the franchise agreement
- Signing a management agreement without checking the SBA directory note on affiliation
- Assuming stabilized occupancy from opening day on a new build
- Leaving too little reserve for rooms out of service during a renovation
- Skipping a property condition assessment on an older Comfort Inn
For more pitfalls that apply across the lodging industry, read the hotel loan mistakes that cost owners the most.
Next Steps to Finance Your Comfort Inn Franchise
Step 1: Request the current FDD. Get the Comfort FDD and study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Define the project. Decide whether you are building, converting or buying, and gather the site plan, construction budget or the existing hotel’s financial history.
Step 3: Get the PIP or prototype requirements. For a conversion or purchase, obtain the PIP; for a new build, confirm the prototype and design standards the brand will require.
Step 4: Talk with a financing specialist early. Compare SBA 7(a), SBA 504 and conventional options, and decide whether owner-management or a management company fits the deal. Our SBA loan calculator gives early payment estimates for planning only, not an offer or approval.
Step 5: Order third-party reports. Arrange an appraisal, environmental report, property condition assessment and, for new construction, a feasibility study.
Step 6: Coordinate brand approval and loan approval. Align the franchise application, franchise agreement signing and loan commitment so neither holds up the other.
Step 7: Close with reserves in place. Fund working capital, an FF&E reserve for future replacements and a PIP contingency.
Comfort Inn Franchise Loan FAQs
How much does it cost to open a Comfort Inn?
The estimated initial investment for a new Comfort hotel is stated in Item 7 of the current FDD and depends heavily on land, construction costs, room count and market. We could not verify a current figure, so request the FDD and compare it with local construction bids. Buying an existing hotel is priced on its income, condition and market.
What is the Comfort Inn franchise fee?
The initial franchise or affiliation fee is set out in Item 5 of the FDD and usually depends on room count. Choice’s annual report says the company may discount the initial fee as part of its development strategy.
What royalty does Comfort Inn charge?
Choice’s annual report says royalties under its U.S. franchise agreements typically range from 5% to 6% of gross room revenues, with marketing and reservation fees typically 3% to 4%. Your agreement and FDD set the exact rates for your hotel.
How much money do I need to qualify?
Choice does not publish a single net worth or liquidity minimum in the materials we reviewed. Expect both the brand and your lender to require enough cash for the equity injection, closing costs, any PIP and working capital, plus reserves after closing.
Can I get an SBA loan for a Comfort Inn?
Yes, if you and the project qualify. The brand is listed on the SBA Franchise Directory under identifier S0410. If a third-party company will manage the hotel, the lender must review that agreement, and a management company affiliated with the franchisor would make the project ineligible.
Does Choice Hotels offer financing?
The company’s annual report describes fee discounts, franchise agreement acquisition cost payments and a separate program of investment, financing and guaranty support for qualified franchisees. Review Item 10 of the current FDD and your agreement for any terms, including repayment if the hotel leaves the system.
How long is a Comfort franchise agreement?
Choice’s annual report says its U.S. franchise agreements generally have terms of 10 to 30 years, and that either party can terminate early under certain circumstances, such as at designated anniversaries. Check Item 17 and your agreement for your hotel’s terms.
Can a first-time owner get a Comfort Inn franchise loan?
Yes, but lenders and the brand will look for compensating strengths, such as an experienced general manager, a qualified management company, strong liquidity or related real estate or business experience.
What documents do I need to apply?
Expect to provide the FDD and franchise agreement, the PIP or construction budget, historical financials or a feasibility study, a personal financial statement, tax returns, a resume showing relevant experience and any management agreement.
Does the FDD include financial performance information?
Review Item 19 of the current Comfort FDD to see whether it includes financial performance representations. When buying an existing hotel, rely on the property’s own audited or reviewed statements and monthly operating reports.
Final Thoughts
A Comfort Inn franchise loan rewards preparation. Buyers and developers who read the fee schedule closely, price the PIP or prototype before committing, structure management with the SBA directory note in mind and keep real reserves after closing are the ones who close on time and operate with breathing room. The brand’s scale and recognition help, but the deal still stands or falls on the individual hotel and its owner.
US Professional Funding helps franchise owners and hotel buyers finance acquisitions, new construction, renovations, equipment and working capital. Learn more about our franchise financing and hotel and motel financing solutions.
