How to Finance a Scottish Inns Franchise: Roadside Inn Costs
By Anthony Cornella
A Scottish Inns franchise loan usually finances a small economy hotel first and a franchise second. The brand is a long-running limited-service flag, and its franchisor charges flat monthly amounts per room rather than a share of room revenue. That makes the property itself, its condition and its trailing cash flow the center of every financing conversation.
Below: what Scottish Inns is, its published fees, how its SBA Franchise Directory notes affect a loan, and which structures fit purchases, conversions and refinances.
US Professional Funding is not affiliated with, sponsored by or endorsed by Scottish Inns 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 vary, 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.
Scottish Inns Franchise Loan at a Glance
- Brand family: Scottish Inns and Scottish Inns & Suites, an economy, limited-service lodging brand whose name the franchisor says has been in use since 1967.
- Franchisor: Hospitality International, Inc., based in Tucker, Georgia, which franchises five hotel brands and has been franchising since 1982.
- System size: the franchisor reports more than 230 hotels across its brands in North America, in more than 30 U.S. states and Canada.
- 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 across the franchisor’s brands without labeling each brand; confirm the Scottish Inns amount in Item 5 of 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 Scottish Inns/Scottish Suites/Scottish Inns & Suites (code S1535), with notes on management agreements and lien position.
What Is Scottish Inns?
Scottish Inns is a value lodging brand built around a simple promise the franchisor sums up as “A Good Night’s Sleep.” The franchisor positions it as a clean, consistent economy option with limited services, the kind of property travelers find along highways and in smaller markets. Hotels can carry the Scottish Inns name or the Scottish Inns & Suites name.
The franchisor says owners keep control of their facilities and set their own room rates, and it promises fair treatment and no costly surprises. Owners also get access to local, regional and national marketing campaigns, a central reservation system, ongoing training and regional franchise development directors for the Northeast, Midwest, West and Southeast.
Why lenders view it the way they do. A lender sees a modest franchise cost layered on top of an economy hotel. The low fees can help margins on a small property, but a lighter flag brings less demand than a large national chain, so the hotel’s location, condition and management history carry most of the weight. Our article on branded vs. independent hotels explains how lenders weigh a flag against an unbranded property.
Scottish Inns Franchise Costs
Application and initial franchise fee. The franchisor’s 2026 fee summary lists a $1,995 application fee and initial franchise fees from $7,500 to $15,000 across its brands. Item 5 of the current FDD confirms the amount for a Scottish Inns property and any refund terms. These fees are small next to the cost of the hotel.
The hotel itself. Most owners either buy an existing hotel and place it under the brand or convert a hotel they already own. The purchase price, appraisal, property condition report and environmental review drive how much financing a lender will offer.
Conversion work and upgrades. Joining the brand can mean new exterior signage, guest room and lobby refreshes, technology connections and other brand-standard items. Ask the franchisor for a written list of required work before you close so the cost can be built into the loan. See our article on funding a hotel property improvement plan for how renovation scopes are financed.
Technology setup. The 2026 fee summary lists a one-time property management system connectivity setup fee of $195 and a monthly connectivity maintenance fee of $39. Your own system provider may charge separately.
Working capital. Plan reserves for payroll, utilities, insurance, property taxes and debt service through the transition and any slow season.
Total investment. Item 7 of the FDD gives the franchisor’s estimate of initial costs. For a purchase or conversion, expect these categories:
- Application fee and initial franchise fee
- Hotel purchase price or existing property value
- Exterior signage and brand identity items
- Guest room, lobby and exterior improvements
- Furniture, fixtures and equipment (FF&E)
- Property management system connectivity setup
- Training and travel
- Insurance, licenses and permits
- Additional funds for the opening period
Ongoing Fees and How They Affect Your Loan
Flat royalty and marketing. The fee summary combines royalty and marketing at $40 per room per month, and the franchisor’s fee page sets a $750 combined monthly minimum. Because the charge is flat, it does not rise when occupancy or rates rise. For a very small hotel, the minimum may be the amount actually billed, so check the math against your room count.
Education and meeting fee. $35 per hotel per month.
Reservation fees. The fee summary lists per-reservation charges: $2.20 for bookings through each of the two large online travel agency connections it names, $3.50 for other direct-connect channels, $5.50 for call center reservations, $4.90 for bookings through the brand’s consumer 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 these costs in. When sizing a Scottish Inns franchise loan, lenders deduct franchise, reservation and technology costs before measuring debt service coverage. Flat per-room fees are easy to model; reservation fees vary with your channel mix, so base them on actual booking history.
Franchisor Requirements for New Owners
The franchisor’s public pages do not publish a minimum net worth or liquidity requirement for Scottish Inns. Expect the review to focus on the property, its condition and its ability to meet brand standards. Item 5 and Item 6 of the FDD and the franchise agreement spell out the fees, and Item 17 covers term, renewal and transfer.
The approval process. Expect to contact the regional franchise development director, submit an application with the application fee, provide property details and agree on any required improvements. Align that timeline with your lender.
Ways to Own a Scottish Inns
Converting a hotel you own. An independent economy hotel may be able to join the brand if it meets standards. Financing often pairs a refinance with renovation funds. Our article on financing a franchise conversion explains how lenders look at a property changing flags.
Buying a hotel and flagging it. A buyer acquires an existing property and joins the brand at or after closing. The lender underwrites the hotel’s history and the cost of any conversion work. See our hotel and motel acquisition financing options.
Buying an existing Scottish Inns. A transfer keeps the flag in place, subject to franchisor approval and any transfer fee in the FDD. Buyers should confirm the remaining franchise term and any upgrades the franchisor will require at transfer.
Financing Options for a Scottish Inns Franchise
SBA 7(a) loans. An SBA 7(a) loan can fund the hotel purchase, renovation, FF&E and working capital in one package for an owner-operator.
SBA 504 loans. When the hotel’s real estate is the main asset, an SBA 504 loan can finance land, building and major long-lived improvements, often alongside a separate loan for working capital.
Conventional term loans. A conventional business loan may fit owners with strong equity and a hotel with steady historical cash flow, or properties and structures that fall outside SBA rules.
Equipment and FF&E financing. Guest room furniture, mattresses, HVAC units, laundry equipment, televisions and front-desk technology can be financed separately, which can preserve cash for the renovation itself.
Working capital and lines of credit. Highway and leisure markets can be seasonal, and a line of credit can cover payroll and repairs in slower months. See our hotel working capital options.
Seller financing on resales. On a hotel sale, a seller may agree to carry part of the price. A seller note is typically subordinate to the senior loan, and SBA programs can limit how one is structured.
SBA Loans for Scottish Inns Franchisees
SBA lenders generally check the SBA Franchise Directory before lending to a franchised business. A listing means the brand’s franchise documents have been reviewed for SBA eligibility; it does not approve any borrower. Scottish Inns is listed under code S1535, covering the Scottish Inns, Scottish Suites and Scottish Inns & Suites names. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
What the directory notes mean. The listing carries two notes.
Management agreements. If the hotel will be run by an outside management company, the lender must review that management agreement under SBA rules to see whether the borrower and the manager are affiliated. The borrower is not eligible if the management company is the franchisor or is affiliated with it. If you plan outside management, share the draft agreement early.
Lien position. The lender must take the correct lien position on all collateral under SBA rules. In plain terms, expect liens on the real estate, FF&E and other business assets, with any other debt fitting around them.
SBA application tips. Gather three years of hotel financials, occupancy and rate reports, tax returns and a property condition report. See SBA loans for hotels.
How Lenders Evaluate a Scottish Inns Deal
Personal credit and financial history. Expect a review of credit, tax returns and a personal financial statement, plus a personal guarantee.
Net worth and liquidity. Hotels are capital-intensive. Lenders want to see your equity injection plus reserves left over after closing.
Hospitality experience. Prior hotel ownership or management is a major strength. A first-time owner should show a plan for a capable general manager.
Projections. Base projections on the hotel’s actual occupancy and average daily rate, then add the flat per-room franchise fees, reservation costs by channel and renovation downtime.
The FDD and franchise agreement. Lenders look at the term, termination and transfer provisions, and the fee schedule.
The property. Expect an appraisal, environmental review and property condition assessment. Our article on what hotel lenders require lists the documents most deals need.
Property Condition and FF&E
For an economy hotel, physical condition is often the biggest financing variable. Roofs, parking lots, HVAC systems and guest room soft goods age quickly, and the franchisor may require specific improvements to meet brand standards. Build those costs into the loan rather than funding them from operating cash after closing.
Multi-Unit Growth
Owners who do well with one Scottish Inns often add a second hotel nearby or flag another property under one of the franchisor’s other brands. Lenders evaluate the combined portfolio, so keep clean statements for each hotel. Each additional hotel needs its own franchise approval.
Real-World Scenarios
A conversion with renovation. An owner of an independent roadside motel joins the brand, refinances existing debt and adds funds for new signage and room upgrades.
A first-time buyer. A buyer with hotel management experience uses a Scottish Inns franchise loan through the SBA 7(a) program to buy and flag a small economy hotel, keeping a working capital reserve.
An owner adding third-party management. An investor plans to hire a management company. The lender reviews the agreement under the SBA directory note to confirm there is no affiliation with the franchisor.
Common Mistakes to Avoid
- Assuming the flat fee works in your favor without checking the $750 monthly minimum against your room count
- Ignoring reservation fees when modeling expenses
- Skipping a property condition report on an older hotel
- Signing a management agreement before the lender has reviewed it
- Leaving required upgrades out of the loan request
For more pitfalls, see the hotel loan mistakes owners make most often.
Next Steps to Finance Your Scottish Inns Franchise
Step 1: Request the FDD and fee schedule. Confirm Items 5, 6, 7 and 17 with the franchisor’s development team.
Step 2: Gather property data. Collect three years of financials, occupancy and rate reports and a property condition report.
Step 3: Get the improvement list in writing. Ask what the franchisor will require to join or transfer the brand.
Step 4: Run payment estimates. Use our SBA loan calculator for planning figures; results are estimates, not offers.
Step 5: Talk with a financing specialist. Discuss SBA, conventional and FF&E options for the property.
Step 6: Apply and coordinate approvals. Align the franchise approval timeline with loan underwriting and any management agreement review.
Step 7: Close and reflag. Fund working capital, schedule upgrades and complete the brand transition.
Scottish Inns Franchise Loan FAQs
How much is the Scottish Inns franchise fee?
The franchisor’s 2026 fee summary lists a $1,995 application fee and initial franchise fees from $7,500 to $15,000 across its brands. Item 5 of the FDD confirms the Scottish Inns amount.
What royalty does Scottish Inns charge?
Royalty and marketing are combined at $40 per room per month, with a $750 combined monthly minimum.
Is Scottish Inns on the SBA Franchise Directory?
Yes, under code S1535, with notes on management agreements and lien position.
Can I use an SBA loan with a hotel management company?
Possibly. The lender must review the agreement, and the borrower is not eligible if the management company is the franchisor or is affiliated with it.
Can I convert my independent motel?
Ask the franchisor whether your property meets brand standards. A Scottish Inns franchise loan can combine a refinance with renovation funds.
How much does a Scottish Inns hotel cost?
It depends mostly on the property. Item 7 of the FDD gives the franchisor’s estimate of initial costs, but the hotel’s purchase price or value usually dominates.
Does the franchisor offer financing?
Check Item 10 of the FDD. Most owners arrange their own financing.
Can I finance FF&E separately?
Yes. Furniture, mattresses, HVAC units and technology can often be financed apart from the real estate loan.
Can a first-time hotel owner qualify?
Yes, with enough equity, reserves and a plan for experienced management.
How long is the franchise term?
Item 17 of the FDD and the franchise agreement state the term, renewal and transfer conditions.
Final Thoughts
A Scottish Inns franchise loan rests on the hotel’s own performance and condition, supported by low, flat franchise costs. Buyers who model the per-room fees and reservation charges accurately, budget for upgrades and plan management around the SBA directory notes are in the strongest position.
US Professional Funding helps hotel owners and franchise buyers finance acquisitions, conversions, renovations and working capital. Learn more about our franchise financing and hotel and motel financing solutions.
