How to Finance a MainStay Suites Franchise: Build or Convert
By Anthony Cornella
A MainStay Suites franchise loan finances a hotel built for guests who stay a week, a month or longer. That changes the numbers a lender studies: kitchens in every suite, weekly rather than daily housekeeping, a smaller staff and revenue that depends on longer bookings instead of one-night stays.
Below we cover the brand’s structure, its disclosed fees and terms, how SBA and conventional financing apply to new construction and conversions, and what the SBA Franchise Directory note on management agreements means for owners who hire an outside operator.
US Professional Funding is not affiliated with, sponsored by or endorsed by MainStay Suites or Choice Hotels International; the name is used only to describe the business. Figures from the franchisor’s disclosure document and annual report 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 qualified franchise attorney and accountant.
MainStay Suites Franchise Loan at a Glance
- Brand: a midscale extended stay brand franchised by Choice Hotels International, which describes it as offering developers flexible conversion and new construction opportunities.
- System size: 143 hotels with 10,337 rooms in the United States, and 151 hotels with 11,017 rooms worldwide, at December 31, 2025, according to the company’s annual report.
- Royalty: the company’s annual report says royalties under its 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.
- Franchise term: U.S. franchise agreements generally run 10 to 30 years.
- Affiliation fee and initial investment: disclosed in Items 5 and 7 of the current FDD; the franchisor’s public materials do not publish MainStay-specific figures.
- SBA Franchise Directory: listed as “MainStay Suites ES” (code S1071), with a note on third-party management agreements.
What Is MainStay Suites?
MainStay Suites is the midscale member of the franchisor’s extended stay family. Its suites are residential in style, and every suite has a fully equipped kitchen. Standard amenities include complimentary continental breakfast, high-speed internet, weekly housekeeping and guest laundry facilities, and the brand adds “Like Home” touches such as a lending library and a communal whiteboard. Hotels join the franchisor’s loyalty program.
Where it operates. At the end of 2025 the company reported 143 MainStay Suites hotels in the United States and 151 worldwide. In October 2025 the brand debuted in Australia, its first expansion outside North America. The franchisor says the brand serves guests in business, healthcare, government and construction, including traveling workers, healthcare professionals and relocating families.
Two development paths. The franchisor markets MainStay Suites for both conversions and new construction. Its press materials describe a new-construction prototype with enhanced indoor and outdoor community spaces and a versatile suite layout, as well as a dual-brand prototype that pairs MainStay Suites with another of the franchisor’s brands on one site. On the conversion side, in 2021 the company announced what it called the largest multi-unit transaction in the brand’s history: 15 hotels with nearly 1,700 rooms converting to MainStay Suites.
Why lenders view it the way they do. Lenders financing extended stay hotels focus on length of stay, the local demand base and labor. The franchisor’s development materials compare extended stay staffing of roughly 1 to 12 full-time employees with up to 20 at a traditional hotel, but lenders still want proof that a specific hotel can fill its suites.
MainStay Suites Franchise Costs
Affiliation fee. The company’s annual report explains that its franchise fees usually have three parts: an affiliation fee, a royalty fee, and a marketing and reservation fee. The MainStay Suites affiliation fee, any per-room charges and application fees appear in Item 5 of the FDD. The report also notes that the company may discount fees, including the initial franchise fee, as an incentive.
Land and construction. For a new-build hotel, land and construction are the largest costs by far. Site work, the building shell, suite kitchens and community spaces all sit inside the construction budget, and the prototype’s design guidelines shape what you build.
Furniture, fixtures and equipment (FF&E). Each suite needs beds, seating, a work area, kitchen appliances and televisions, and shared areas need breakfast, laundry and fitness equipment.
Conversion costs. An owner converting an existing hotel pays for the brand’s property improvement plan (PIP), which may include adding kitchens, updating suites and changing signage, plus any costs of leaving a prior franchise.
Total investment. Item 7 of the FDD sets out the estimated initial investment and its line items. Expect the table to include categories such as:
- Affiliation fee and application costs
- Land acquisition or lease (new construction)
- Site work, building construction and architectural fees
- Furniture, fixtures and equipment, including suite kitchens
- Signage and exterior brand elements
- Technology systems, opening supplies and inventory
- Training, pre-opening expenses and insurance
- Additional funds for the initial operating period
Because MainStay-specific ranges are published only in the FDD, base your MainStay Suites franchise loan request on the current Item 7 table plus your contractor’s budget or PIP estimate.
Ongoing Fees and How They Affect Your MainStay Suites Franchise Loan
Royalty. The company’s annual report says royalties typically range from 5% to 6% of gross room revenues. Your exact rate, and any reduced rates in early years, appear in your franchise agreement.
Marketing and reservation fees. These typically range from 3% to 4% of gross room revenues and support national marketing, reservations and the loyalty program.
Other charges. Technology, loyalty, training and re-inspection fees are disclosed in Item 6.
Property improvement obligations. The annual report says the company may require existing hotels to carry out property improvement plans during specified contractual windows. Owners should budget for future upgrades rather than treating today’s PIP as the last one.
How lenders factor these costs in. Royalties and marketing fees are calculated on room revenue, so they rise and fall with occupancy and rate. Lenders subtract them, along with labor, utilities, maintenance and a capital reserve, before measuring how comfortably the hotel’s cash flow covers debt service.
Franchisor Requirements for New Owners
The franchisor’s public materials do not publish a MainStay-specific net worth or liquidity requirement. Expect it to review your financial strength, hotel or business experience, the site or existing property and your development or conversion plan before approving a franchise.
- Brand standards: the annual report describes standards covering cleanliness, condition, brand requirements and minimum service offerings.
- Inspections: most properties are inspected before opening, and existing hotels face scheduled and unannounced reviews.
- Consequences: falling short can lead to warnings, re-inspection fees, mandatory training or, in some cases, termination.
The approval process. Owners typically apply with property and financial details, the franchisor reviews the site or hotel, and a conversion property receives a PIP before signing. Loan and franchise approvals generally need to line up before closing.
Ways to Own a MainStay Suites
New construction. Building a MainStay Suites from the ground up gives you the current prototype but carries construction and lease-up risk. Lenders underwrite on a feasibility study, construction budget and projections. Read about our hotel start-up financing for new-build projects.
Converting an existing hotel. The franchisor highlights conversions as a core path for the brand. Converting can be faster than building, but kitchens, suite updates and a full PIP may be required. Our article on conversion franchise financing covers how lenders handle PIP costs and exits from prior brands.
Buying an existing MainStay Suites. Purchasing an operating hotel brings a track record lenders can underwrite. The buyer typically applies for a new franchise agreement, and the franchisor may issue a change-of-ownership PIP. See our hotel acquisition financing options.
Financing Options for a MainStay Suites Franchise
SBA 7(a) loans. The SBA 7(a) program can finance the purchase of a hotel, a conversion PIP, FF&E and working capital. Because the brand is listed on the SBA Franchise Directory, the franchise relationship has been reviewed for eligibility.
SBA 504 loans. Hotels are long-lived, owner-occupied real estate, which fits the SBA 504 loan program. A 504 structure can finance land, construction or the purchase of an existing hotel. Our article on SBA loans for hotels compares the 7(a) and 504 programs.
Conventional term loans and construction loans. Larger projects and experienced owners may use a conventional business loan, construction financing that converts to permanent debt, or both.
FF&E and equipment financing. Suite kitchens, appliances, laundry machines, breakfast equipment and in-room technology can sometimes be financed separately, preserving cash for construction or a PIP.
PIP and renovation financing. Conversions and change-of-ownership deals usually come with a PIP. Learn how owners fund brand-required work in our article on hotel PIP financing.
Working capital. A new extended stay hotel needs time to build its base of longer-stay guests, so plan a reserve for payroll, utilities and debt service during the ramp-up.
Seller financing on acquisitions. A seller may carry part of the price; any seller note is typically subordinate to the senior loan, and SBA rules may limit its terms.
SBA Loans for MainStay Suites Franchisees
The SBA Franchise Directory lists brands whose franchise agreements have been reviewed for SBA eligibility. SBA lenders generally rely on it so they can focus on the borrower and the hotel rather than re-reviewing the franchise relationship.
MainStay Suites’ listing. The brand appears on the directory as “MainStay Suites ES” with code S1071. The listing carries a note: if the applicant also operates under a management agreement with a third party, the lender or certified development company must review that management agreement under SBA rules to determine whether the applicant and the management company are affiliated. The applicant is not eligible if the management company is, or is affiliated with, the franchisor.
What that note means in plain English. If you hire a management company, the lender will read that contract to see how much control the manager has. If the manager effectively controls the business, the SBA may treat the two companies as affiliated, which can affect eligibility, and if the franchisor or its affiliate manages the hotel, an SBA-backed MainStay Suites franchise loan is not available. Self-managing owners avoid the issue; others should share the draft agreement with their lender early.
Loan size. The SBA 7(a) program maximum is currently $5 million, though program rules can change. Larger new-construction projects may combine SBA 504 financing, conventional debt or both.
Application tips. Submit a feasibility study for new construction, the franchisor’s PIP for conversions, your management plan and agreement, and a sources-and-uses statement built from Item 7 and your contractor’s budget. Our SBA loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
How Lenders Evaluate a MainStay Suites Deal
Personal credit and financial history. Lenders review each significant owner’s credit, tax returns and financial statements.
Net worth and liquidity. Lenders want meaningful equity plus reserves for overruns, PIP surprises and a slow ramp-up.
Industry and management experience. Prior hotel ownership, especially in extended stay, strengthens a request. First-time owners often pair with an experienced manager, which brings the SBA management agreement note into play. See our article for first-time hotel buyers.
Business plan and projections. Projections should reflect extended stay patterns: length of stay, the mix of weekly and monthly guests, demand from local employers, hospitals and job sites, weekly housekeeping labor and the royalty and marketing fees from Item 6.
The FDD and franchise agreement. Lenders check the term, termination rights at designated anniversaries and liquidated damages. The annual report notes that franchise agreements typically include liquidated damages for terminations outside permitted windows.
Site or existing property. New construction calls for a feasibility study, appraisal, environmental report and construction contract; conversions and acquisitions call for the PIP and performance history.
Suite Kitchens, FF&E and the Extended Stay Model
The defining feature of a MainStay Suites hotel is the kitchen in every suite, which adds appliances, cabinetry and plumbing to the budget and more equipment to replace over time. Guest laundry, breakfast areas and fitness rooms add further FF&E, so a MainStay Suites franchise loan request should include a capital reserve sized for this equipment and future PIPs.
Multi-Unit Growth and Development Agreements
Many owners grow one hotel at a time, using the first property’s track record to support the next. The annual report also describes master development agreements, used mainly for other brands, that give developers geographic exclusivity for a set number of hotels in exchange for an upfront fee later applied to affiliation fees.
Financing a second hotel. Once your first hotel has operating history, lenders can underwrite it alongside the new project. The annual report also describes an impact policy that offers existing franchisees some protection from a same-brand hotel opening within a specified distance, though it varies by market. Read our article on buying a second hotel for how lenders view a growing portfolio.
Real-World Scenarios
Converting an older suite hotel. An owner with an aging independent suite hotel near a hospital converts to MainStay Suites. The franchisor issues a PIP covering kitchen upgrades and signage, and an SBA 7(a) loan finances the renovation and working capital during the transition.
A new-construction project near job sites. An experienced developer builds a MainStay Suites near an industrial park. The project uses an SBA 504 structure for land and construction, plus separate FF&E financing for suite kitchens and furnishings.
A first-time owner with a manager. A first-time buyer acquires an existing MainStay Suites and hires a third-party manager. The lender reviews the management agreement for affiliation under SBA rules, and the buyer adjusts the contract so the owner keeps control of key decisions.
Common Mistakes to Avoid
- Underestimating the cost of adding or updating suite kitchens in a conversion
- Projecting extended stay demand without evidence from local employers and institutions
- Signing a management agreement before your SBA lender has reviewed it
- Treating the change-of-ownership PIP as the last renovation the hotel will need
- Ignoring liquidated damages and termination windows in the franchise agreement
- Leaving too little working capital for a new hotel’s lease-up period
For more pitfalls in lodging finance, read the hotel loan mistakes that cost owners the most.
Next Steps to Finance Your MainStay Suites Franchise
Step 1: Choose your path. Decide whether to build, convert or buy.
Step 2: Review the FDD. Study Items 5, 6, 7, 10, 17 and 19 and the franchise agreement with a franchise attorney and accountant.
Step 3: Evaluate the site or property. Commission a feasibility study for new construction, or obtain the PIP and performance history for a conversion or acquisition.
Step 4: Decide on management. Choose between self-management and a third-party manager, and share any draft management agreement with your lender.
Step 5: Talk with a financing specialist. Compare SBA 7(a), SBA 504, construction and conventional options for your project.
Step 6: Apply and coordinate approvals. Submit financial statements, projections, budgets and franchise documents, keeping lender and franchisor approvals aligned.
Step 7: Close and open. Fund construction or the PIP and keep working capital for the ramp-up.
MainStay Suites Franchise Loan FAQs
How much does a MainStay Suites franchise cost?
The franchisor does not publish MainStay-specific investment figures outside its FDD. Item 7 of the current FDD sets out the estimated initial investment and its line items, and actual costs depend on land, construction or the scope of a conversion PIP.
What royalty does MainStay Suites charge?
The company’s annual report says royalties under its franchise agreements typically range from 5% to 6% of gross room revenues, plus marketing and reservation fees of 3% to 4%. Your franchise agreement sets the exact rates.
What is the MainStay Suites affiliation fee?
The affiliation fee is disclosed in Item 5 of the FDD. The company’s annual report notes that it may discount fees, including the initial franchise fee, as a development incentive.
How many MainStay Suites hotels are there?
The company reported 143 MainStay Suites hotels with 10,337 rooms in the United States, and 151 hotels with 11,017 rooms worldwide, at December 31, 2025.
Can I get an SBA loan for a MainStay Suites?
Yes, subject to approval. The brand is listed on the SBA Franchise Directory as “MainStay Suites ES” (S1071). If you use a third-party manager, the lender must review that agreement for affiliation, and the loan is not eligible if the manager is, or is affiliated with, the franchisor.
Can I convert my existing hotel to MainStay Suites?
Yes. The franchisor describes MainStay Suites as offering flexible conversion opportunities. Expect a PIP, which may include adding or updating suite kitchens.
How long is a MainStay Suites franchise agreement?
The company’s annual report says its U.S. franchise agreements generally run 10 to 30 years, with possible termination rights at designated anniversaries.
Does the franchisor offer financing?
The company’s annual report describes a program under which it may offer investment, financing and guaranty support to qualified franchisees. Review Item 10 of the FDD and ask what applies to your project.
Can a first-time hotel owner get a MainStay Suites franchise loan?
It is possible, though lenders and the franchisor weigh experience closely, and many first-time owners hire a manager.
Does the FDD include financial performance information?
The franchisor’s development materials reference Item 19 of its FDD. Review the current Item 19 to see what financial performance representations it includes.
Final Thoughts
Financing a MainStay Suites hotel comes down to a few questions: build or convert, how to fund suite kitchens and the PIP, how the extended stay model shapes projections, and whether a third-party manager will trigger the SBA affiliation review. Answer them early, with realistic reserves, and lenders will see a stronger request.
US Professional Funding helps hotel owners and franchise buyers finance acquisitions, construction, renovations and working capital. Learn more about our franchise financing and hotel and motel financing solutions.
