How to Finance a Hampton Inn Franchise: Costs, PIPs and SBA
By Chris Cornella
A Hampton Inn franchise loan is rarely a single loan. Owning one of the most recognized names in select-service lodging usually means financing land or an existing building, guest room furniture and fixtures, brand-required improvements, opening costs and enough working capital to carry the hotel until it stabilizes. Because the price tag is closer to commercial real estate than to a typical small business franchise, the structure of the financing can matter as much as the property itself.
This guide explains what it costs to own a Hampton by Hilton hotel, the fees that continue after opening, the ways buyers and developers become Hampton owners, how SBA and conventional financing may fit, and what lenders look for before they approve a Hampton deal. It is general information only. US Professional Funding is not affiliated with, sponsored by or endorsed by Hampton by Hilton or Hilton; the name is used only to describe the business. Figures come from the franchisor’s own disclosure document and 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.
Hampton Inn Franchise Loan at a Glance
Hampton Inn and Hampton Inn & Suites are franchised by Hilton and sit in the upper-midscale, select-service segment: hotels built around guest rooms, a free hot breakfast and a lean staff rather than full restaurants and banquet space. According to Hilton’s 2025 Hampton Franchise Disclosure Document:
- Franchise application fee: $100,000, plus $400 for each guest room or suite over 150, for new development or conversion
- Change of ownership application fee: $200,000
- Monthly royalty fee: 6% of gross rooms revenue
- Monthly program fee: 4% of gross rooms revenue, which the franchisor may change
- Estimated initial investment, newly built 89-room Hampton Inn: about $15.2 million to $22.2 million, not including the cost of land
- Estimated initial investment, newly built 113-room Hampton Inn & Suites: about $17.7 million to $26 million, not including the cost of land
- System size: Hilton reports more than 3,200 Hampton properties in 46 countries and territories as of 2026
- SBA Franchise Directory: listed as Hampton Inn by Hilton (code S0781) and Hampton Inn & Suites by Hilton (code S5593), each with a note about third-party management agreements
Hilton does not publish a fixed minimum net worth or liquid capital figure for Hampton owners in the materials we reviewed; instead, the brand evaluates each applicant, project and market individually. Prospective owners should always review the current disclosure document in full, because fees, prototypes and cost estimates are updated over time.
What Is Hampton by Hilton?
Hampton is one of the longest-running franchised hotel brands in the United States. According to the disclosure document, Hampton Inn hotels were first franchised in 1983 by a predecessor company, and Hampton Inn & Suites hotels were first franchised in 1993. The current franchisor, Hilton Franchise Holding LLC, has offered Hampton franchises since March 30, 2015, and Hilton is headquartered in McLean, Virginia.
The concept is deliberately focused: guest rooms, a complimentary hot breakfast, a fitness room and a lobby that doubles as a work space, with no full-service restaurant or banquet operation to staff and finance. Hampton Inn & Suites adds suites with more living space for longer stays and families.
In 2024, Hilton introduced a new North American prototype for both Hampton Inn and Hampton Inn & Suites, with a redesigned lobby, reworked guest rooms and bathrooms, and new furniture packages that Hilton said could save owners up to 6% compared with prior packages. For a borrower, the prototype matters because it shapes the construction budget, the furniture and fixtures order and the timeline lenders will underwrite.
Why lenders know the brand. Hampton’s large system, select-service model and long track record mean many lenders and appraisers have seen Hampton deals before. That familiarity does not guarantee approval, but it can make underwriting conversations more efficient. Our article on branded vs. independent hotels explains how a flag can affect value and financing.
Hampton Inn Franchise Costs
The total cost of a Hampton depends heavily on whether you build, convert or buy, and on the market, site and room count. The disclosure document provides cost estimates for new construction; resales and conversions are priced property by property.
Initial franchise fee
For new development or conversion, Hilton’s 2025 disclosure document lists a franchise application fee of $100,000, plus $400 for each guest room or suite over 150. A buyer taking over an existing Hampton through a change of ownership pays a $200,000 application fee, and a re-licensing application is $100,000. Application fees are generally nonrefundable once the application is approved; if an applicant withdraws or is denied, the fee is refunded less a $7,500 processing fee.
Land, construction and real estate
The investment ranges in the disclosure document exclude land, so a developer must add land or ground lease costs on top of the published totals. Site work, construction, architecture and engineering, permits and impact fees typically make up the largest share of a new-build budget, and they vary widely by market. For conversions and resales, the real estate is the purchase price itself, plus whatever renovation the brand requires.
Furniture, fixtures and equipment
Guest room case goods, beds, soft goods, lighting, televisions, the breakfast area, lobby furniture, fitness equipment, laundry and back-of-house equipment all fall under furniture, fixtures and equipment. Owners who buy through the franchisor or its affiliates pay procurement and services fees of 4% to 10% of project cost, according to the disclosure document.
Opening costs, technology and training
Several brand-specific opening costs appear in the 2025 disclosure document:
- Opening process services fee: $6,000, due before opening
- Training program fees: $5,000 to $17,500
- Other initial start-up fees: currently $5,100
- OnQ computer system hardware, software and installation: currently $27,590 to $83,959
- PIP fee: $10,000, due before a property improvement plan inspection is scheduled for conversions, changes of ownership and re-licensing
Working capital and total investment
On top of these items, owners need pre-opening payroll, marketing, insurance, supplies and reserves to carry the hotel while occupancy builds. Review the Item 7 table in the current disclosure document for the full line-by-line breakdown and the assumptions behind it, and compare it with your contractor’s and architect’s estimates for your actual site.
Ongoing Fees and How They Affect Your Loan
A lender sizes a hotel loan on the cash flow left after operating expenses, and franchise fees come off the top. According to Hilton’s 2025 Hampton disclosure document:
- Royalty fee: 6% of gross rooms revenue, paid monthly
- Program fee: 4% of gross rooms revenue, paid monthly, which the franchisor may change
- OnQ connectivity: currently $400 to $600 per month
- OnQ hardware and software maintenance: currently $1,114 to $2,568 per month
- Connected Room maintenance: currently $417 to $779 per month
- Room addition fee: currently $400 per added guest room or suite
- Permitted transfer processing fee: currently $5,500
Because the royalty and program fee are calculated on gross rooms revenue, they rise and fall with room sales. Lenders build them into projections along with management fees and a replacement reserve before calculating debt service coverage, so a budget that leaves them out overstates the loan a property can support.
Technology refresh is another planning item. The disclosure document says the OnQ system must be refreshed at least every 3 years, or as the franchisor specifies, so owners should plan for periodic technology spending in addition to monthly maintenance.
Renovation obligations and penalties
For new development, the disclosure document says construction must start within 15 months after the application is approved. For conversions, re-licensing, changes of ownership and room additions, start and completion dates are set project by project in the franchise agreement or PIP. Late plans and designs can trigger a $5,000 fee every 90 days, and required renovation work that is not properly completed can trigger a $10,000 fee every 6 months. Those deadlines should line up with your construction loan or renovation draw schedule.
Franchisor Requirements for New Owners
Hilton approves both the owner and the property. The brand looks at the market, the site or existing building, the proposed room count and product, and the applicant’s financial capacity and hospitality experience. Hilton does not publish a fixed minimum net worth or liquidity figure for Hampton, so expect the review to be tailored to the size of the project.
In general, the owner submits an application and fee; for an existing hotel, pays the PIP fee so the brand can inspect the property and issue a property improvement plan; signs the franchise agreement once approved; and then completes construction or renovation and training before opening.
Brand approval and loan approval often depend on each other, so many owners run both processes in parallel.
Ways to Own a Hampton Inn
How you become a Hampton owner shapes almost every financing decision that follows.
Buying an existing Hampton Inn. The property already operates under the brand, with a performance history a lender can study. Hilton must approve the new owner through the change of ownership process, and a change of ownership typically comes with a PIP listing renovations the buyer must complete. For many first-time hotel owners, this is the most financeable route, because lenders can underwrite actual results rather than projections. See our guides on hotel acquisition financing and how to buy a hotel.
Converting an existing hotel. An owner of an independent or differently branded hotel may apply to convert it to a Hampton. Conversions can involve significant renovation, and lenders look at both the as-is value and projected performance after conversion.
New development. Building a Hampton from the ground up involves land, entitlements, construction and a ramp-up period before occupancy stabilizes. It is typically the largest and most complex of the three paths, and lenders usually expect more equity, a feasibility study and a contractor with hotel experience. Our page on hotel start-up financing outlines how new projects are funded.
What a Hampton Inn Franchise Loan Can Cover
Depending on the path, the loan program and lender approval, financing for a Hampton property may help pay for the land and building or purchase price, construction, furniture and fixtures, PIP renovations, brand fees and technology, pre-opening payroll and training, and working capital while occupancy builds.
PIP costs deserve special attention on resales and conversions. A buyer who budgets only for the purchase price can be caught short when brand standards require new case goods, bathrooms or exterior work. See our article on hotel PIP financing for how owners plan for brand-required renovations.
Financing Options for a Hampton Inn Franchise
SBA 7(a) loans. The SBA 7(a) program can be used to buy an existing hotel and, in some cases, to fund renovations, the change of ownership fee and working capital in the same loan. Hotels generally fit the SBA’s focus on owner-operated businesses because the owner runs an active operating business rather than collecting passive rent. The 7(a) program maximum is currently $5 million, and program rules can change. Many Hampton projects exceed that amount, so 7(a) is often used for smaller acquisitions or combined with other financing, subject to program rules.
SBA 504 loans. SBA 504 loans are designed for owner-occupied real estate and long-lived fixed assets. For a hotel purchase, new construction or major renovation, the 504 structure pairs a bank loan with a loan through a certified development company and a borrower contribution, and may allow longer fixed-rate financing on the real estate portion, subject to program rules and lender approval. Our comparison of SBA 7(a) vs. 504 loans for hotels explains when each tends to fit.
Conventional hotel loans. Experienced owners with strong liquidity and an operating record may use conventional bank financing, particularly for larger properties, new construction or portfolios. Terms vary widely, and construction loans are usually drawn against project milestones.
Furniture, fixtures and equipment financing. Some owners finance the guest room furniture package, televisions, fitness or laundry equipment separately, though the primary lender will consider that debt.
Working capital and lines of credit. A new Hampton needs cash for pre-opening payroll, training and marketing, and to cover the months before occupancy stabilizes. Existing hotels may need a cushion while rooms are out of service during a PIP or during slower seasons. Our page on hotel working capital and lines of credit covers those needs.
Seller financing on resales. When buying an existing Hampton, part of the price may sometimes be carried by the seller. Lenders and SBA rules may limit how seller notes are structured, and a seller note is typically subordinate to the primary loan.
SBA Loans for Hampton Inn Franchisees
SBA-backed loans are made by participating lenders with an SBA guarantee on part of the loan. For a franchise, the lender also confirms that the borrower controls its own business, and the SBA Franchise Directory helps with that review.
The SBA Franchise Directory listings. Hampton Inn by Hilton appears on the directory under code S0781, and Hampton Inn & Suites by Hilton appears under code S5593. A directory listing can simplify the lender’s review of the franchise agreement, but it does not approve any borrower or guarantee a loan.
What the directory note means. Both Hampton listings carry the same note: if the applicant also operates under a management agreement with a third party, the lender or certified development company must review the management agreement in accordance with SOP 50 10 to determine whether there is affiliation between the applicant and the management company. The applicant is not eligible if the management company is, or is affiliated with, the franchisor. In plain English, an owner can hire an independent management company, but the lender must check that relationship, and a hotel managed by Hilton itself or a Hilton affiliate would not qualify for SBA financing under this note. Owners who plan to hire a management company should share that agreement with their lender early.
SBA application tips for Hampton owners. Have the franchise agreement or change of ownership approval, the PIP, any management agreement and a sources and uses statement ready, along with personal financial statements, tax returns and résumés for each owner.
How Lenders Evaluate a Hampton Inn Deal
Hotels re-sell their inventory every night, so lenders look closely at both the property and the people running it.
Personal credit and financial history. Lenders review the credit history, tax returns and debts of each principal owner, and significant owners typically provide personal guarantees.
Net worth and liquidity. Expect questions about the cash you will contribute and the reserves you will have after closing. Liquidity matters more on hotels than many businesses because renovations, slow seasons and ramp-up periods all draw on cash.
Hotel operating experience. Prior ownership or management of hotels weighs heavily. Buyers without that background may strengthen a request by partnering with an experienced operator or hiring a qualified management company.
Business plan and projections. For a new build or conversion, lenders expect a feasibility study showing demand from business, leisure and group travel, along with projections for occupancy, average daily rate and revenue per available room. Those projections should include the royalty, program fee, technology costs, management fees and a replacement reserve.
The disclosure document and franchise agreement. Lenders review the franchise agreement term, renovation deadlines, transfer provisions and any termination rights, and they want the loan term and the franchise term to fit together.
Real estate and condition. An appraisal, property condition report, environmental review and PIP budget are standard for existing hotels; for new development, lenders review the site, entitlements and construction contract.
Historical financials on resales. For an existing Hampton, lenders study several years of operating statements, the monthly performance against nearby competitors and the seller’s tax returns. Our article on hotel loan requirements walks through how lenders underwrite occupancy, rate and cash flow.
Hotel FF&E, PIPs and the Renovation Cycle
For a Hampton owner, furniture, fixtures and equipment are not a one-time purchase. Brand standards evolve, guest rooms wear, and a change of ownership or re-licensing usually triggers a PIP. That makes renovation planning a core part of the financing conversation.
A PIP can range from soft goods and paint to full guest room and bathroom renovations and lobby redesigns. When rooms are out of service, revenue falls just as spending rises. Lenders may fund PIP costs at closing, hold them in a reserve released as work is completed, or expect the owner to fund part of the work. Planning for the OnQ refresh and a replacement reserve can reduce the need for emergency financing later.
Multi-Unit Growth and Development Agreements
Many Hampton owners operate more than one hotel. Each property typically has its own franchise agreement, application fee and approval, so growth happens one hotel at a time even when an owner plans several.
Financing a second or third Hampton usually starts with the performance of the first. Lenders look at global cash flow, remaining liquidity and whether the team can handle another property. SBA program limits apply across all of a borrower’s SBA loans, so larger portfolios often shift toward conventional financing. Keeping clean, property-level financial statements for each hotel makes every later request easier to underwrite.
Real-World Scenarios
An experienced owner buying a second Hampton. An owner with one successful hotel finds an existing Hampton in a nearby market. The seller’s operating history supports the purchase, and the buyer includes the PIP budget in an SBA 7(a) request so renovations are funded at closing rather than out of cash flow.
Converting an independent hotel. An owner of a well-located independent hotel applies to convert to Hampton. Because the renovation is substantial, the owner looks at a 504 structure for the real estate and improvements and keeps a separate cushion for the period when rooms are taken out of service.
A first-time investor partnering with an operator. A buyer with capital but no hotel experience partners with an experienced operator and a third-party management company. The lender reviews the management agreement early because of the affiliation note on the Hampton directory listing.
A developer building a new Hampton Inn & Suites. A developer with prior hotel projects secures a site and brand approval for the new prototype. Because the project exceeds SBA limits, the developer pursues a conventional construction loan with draws tied to milestones and lines up working capital for the pre-opening period.
Common Mistakes to Avoid
- Budgeting for the purchase price but not the PIP, change of ownership fee or opening costs, or forgetting that the published ranges exclude land
- Signing a purchase contract before confirming brand approval and financing timelines
- Leaving out royalty, program and technology fees when projecting cash flow
- Leaving too little working capital for slower months, ramp-up or a renovation period
- Hiring a management company without checking the SBA directory note on affiliation
- Comparing loan offers only on rate instead of term, prepayment terms and guarantees
For more, read the hotel loan mistakes that cost owners the most.
Next Steps to Finance Your Hampton Inn Franchise
Step 1: Choose your path. Decide whether you are buying, converting, building or re-licensing; each path changes the budget, timeline and likely lenders.
Step 2: Review the disclosure document. Read the current Hampton disclosure document with a franchise attorney, paying attention to fees, the Item 7 cost table, brand standards, the franchise agreement term and transfer provisions.
Step 3: Build a realistic budget. Include the purchase or development cost, land, PIP or construction costs, furniture and fixtures, fees, technology, opening costs and working capital, then add a contingency.
Step 4: Talk with a financing specialist early. Before signing a purchase contract or committing to land, confirm which loan structures may fit and how much equity you will likely need. Our SBA loan calculator can help with early payment estimates, which are for planning only and do not represent an offer or approval.
Step 5: Assemble your documents. Gather financial statements, tax returns, résumés, the contract or site control, the PIP or construction budget, any management agreement and a feasibility study or historical financials.
Step 6: Apply to the brand and the lender in parallel. Brand approval and loan approval often depend on each other, so coordinate both applications and keep timelines aligned with your purchase contract.
Step 7: Close and plan the transition. For an existing hotel, plan the change of ownership, staffing, management agreement and PIP schedule. For new development, plan construction draws, pre-opening and the ramp-up period.
Hampton Inn Franchise Loan FAQs
How much does it cost to open a Hampton Inn?
Hilton’s 2025 disclosure document estimates about $15.2 million to $22.2 million for a newly built 89-room Hampton Inn and about $17.7 million to $26 million for a newly built 113-room Hampton Inn & Suites, in both cases not including land. Buying an existing hotel or converting one can cost more or less depending on the property and the renovations required.
What is the Hampton Inn franchise fee?
For new development or conversion, the application fee is $100,000, plus $400 for each guest room or suite over 150. A change of ownership application fee is $200,000, according to the 2025 disclosure document.
What fees does Hampton charge after opening?
According to the 2025 disclosure document, the monthly royalty fee is 6% of gross rooms revenue and the monthly program fee is 4% of gross rooms revenue. Technology, connectivity and other fees also apply, so review the full disclosure document.
How much net worth or liquid capital do I need?
Hilton does not publish a fixed minimum for Hampton in the materials we reviewed. The brand and your lender will each judge whether your equity and reserves fit the size of the project, and hotel projects generally require substantial liquidity.
Can I use an SBA loan for a Hampton Inn?
Possibly. Both Hampton Inn and Hampton Inn & Suites are listed on the SBA Franchise Directory, and hotels are a property type SBA lenders frequently finance. Eligibility still depends on the borrower, the project, program rules and lender approval, and the directory note on management agreements applies.
Do I need hotel experience to get a Hampton Inn franchise loan?
Lenders and the brand both weigh experience heavily. Buyers without hotel experience may strengthen their request by partnering with an experienced operator or hiring a qualified management company.
Does the loan cover a property improvement plan?
Often it can. Many buyers include PIP costs in their acquisition financing so renovations are funded at closing, depending on the loan program and lender review.
Does Hilton offer financing for Hampton owners?
Check Item 10 of the current disclosure document, which describes any financing the franchisor offers. Owners who do not use franchisor financing arrange their own loans through lenders.
How long is the Hampton franchise agreement?
The term, renewal and transfer rules appear in the franchise agreement and Item 17 of the disclosure document, and they can vary by project. Lenders generally want the franchise term to extend at least as long as the loan.
Can I own more than one Hampton?
Yes, many owners operate several. Each hotel typically requires its own application and approval, and lenders look at the performance of your existing properties and your remaining liquidity before financing the next one.
Final Thoughts
A Hampton Inn franchise loan is a significant commitment, but the brand’s familiarity with lenders, its SBA directory listings and its select-service model can make a well-prepared deal financeable. Owners who choose the right path, budget for every brand fee and renovation, and line up brand and lender approvals together give themselves the best chance of a smooth closing.
US Professional Funding helps buyers and owners finance franchised hotels, including acquisitions, new development, renovations and refinancing. Learn more about our franchise financing and hotel and motel financing.
