How to Finance a Suburban Studios Franchise: Budget Extended Stay
By Anthony Cornella
A Suburban Studios franchise loan usually funds one of two projects: converting an existing hotel into an economy extended-stay property, or building a new one from the brand’s cost-optimized prototype. Because the brand is built around conversions, many deals combine an acquisition, a kitchen retrofit and a property improvement plan in a single financing package.
US Professional Funding is not affiliated with, sponsored by or endorsed by Suburban Studios or its franchisor, Choice Hotels International; the name is used only to describe the business. Figures from the franchisor’s disclosure document and public filings 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; review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Suburban Studios Franchise Loan at a Glance
- Segment: economy extended stay, offered to developers mainly through flexible conversion options
- System size: 115 open hotels with 9,558 rooms, all in the United States, as of December 31, 2025, according to the franchisor’s annual report
- Guest offer: in-room kitchens in every guestroom, free high-speed internet, 24/7 laundry and bi-weekly housekeeping
- Conversion tool: a modular “Kitchen in a Box” package that the franchisor says lets owners convert nearly any transient hotel
- Royalty and marketing: the franchisor says its royalties typically range from 5% to 6% of gross room revenues and marketing and reservation fees from 3% to 4%; the Suburban Studios rates are in Item 6 of the FDD
- Investment (older reference): the 2022 FDD estimated $158,450 to $1,462,895 for an 88-room conversion and $4,544,926 to $8,519,444 for a 117-room new build, excluding land
- Franchise term: the franchisor’s U.S. agreements generally run 10 to 30 years
- SBA Franchise Directory: listed as Suburban Studios ES under code S1638, with notes on management agreements and length of stay
What Is Suburban Studios?
Suburban Studios is the economy extended-stay brand of Choice Hotels International. It operated for years as Suburban Extended Stay Hotel, and the franchisor relaunched the legacy brand in 2022 with a refreshed design and identity under the Suburban Studios name.
The guest offer. The franchisor describes the brand’s approach as “longer stays made easy.” Every guestroom has an in-room kitchen, and properties offer free high-speed internet, laundry around the clock and bi-weekly housekeeping.
A conversion-first brand. The franchisor’s annual report says Suburban Studios offers developers access to economy extended stay “through flexible conversion options.” Its press materials describe conversion paths for existing extended-stay hotels and for select traditional hotels with larger guest rooms, plus a cost-optimized new construction prototype where owners can adjust room counts, design and amenities to the local market.
Why lenders view it the way they do. Lenders see an established franchisor and a lean operating model, but they look hard at the condition of the building being converted, the cost of adding kitchens and the property’s length-of-stay mix, which matters for SBA eligibility as explained below.
Suburban Studios Franchise Costs
The most detailed Item 7 we could review is from the brand’s FDD issued April 1, 2022, under the earlier Suburban name. Treat it as a reference point only and get the current FDD before you budget.
Affiliation fee. Item 5 of the current FDD sets the affiliation fee, and fee terms for hotel franchises are often calculated per room. The franchisor’s annual report notes that franchise agreements are generally individually negotiated, so confirm the exact amount for your property.
Conversion costs. The 2022 FDD estimated $158,450 to $1,462,895 to convert an 88-room hotel, not counting the cost of buying or leasing the land and building. That range included $35,250 to $52,095 payable to the franchisor or its affiliates.
New construction. The same FDD estimated $4,544,926 to $8,519,444 for a 117-room newly built hotel, again excluding land and real estate taxes. Expect site work, vertical construction, FF&E, kitchens in every room, soft costs and pre-opening expenses to make up most of that total.
Typical Item 7 categories to map against your loan request include:
- Affiliation fee and application costs
- Land or building acquisition (excluded from the franchisor’s estimate)
- Construction or conversion renovation, including kitchen installation
- Furniture, fixtures and equipment for guestrooms and laundry
- Signage and brand-standard exterior updates
- Property management system, technology and training
- Pre-opening payroll, insurance, licenses and permits
- Additional funds for the opening period
Ongoing Fees and How They Affect Your Suburban Studios Franchise Loan
Royalty. The franchisor’s annual report says its royalty fees typically range from 5% to 6% of gross room revenues. Item 6 shows the Suburban Studios rate.
Marketing and reservation fees. These typically range from 3% to 4% of gross room revenues across the franchisor’s system. Item 6 also lists system, technology and loyalty-related charges.
Early-year discounts. The franchisor may discount royalty and marketing fees during the first years of an agreement, and those discounts generally step up over time. Lenders model the full contractual rate, not the introductory one.
Improvement plans. The franchisor may require property improvement plans for new entrants when needed and for existing hotels at specified contractual windows. Build a capital reserve for kitchen appliances, which wear out faster than the building.
How lenders use these numbers. A lender takes projected room revenue, subtracts franchise fees, payroll, utilities, taxes, insurance and reserves, then tests whether what remains covers debt service with a cushion. Test payment scenarios with our SBA loan calculator.
Franchisor Requirements for New Owners
The franchisor does not publish a minimum net worth or liquidity figure for Suburban Studios, and requirements are evaluated property by property. Expect a franchise application, a review of the site and building, a conversion or construction plan approved by the franchisor, and execution of the franchise agreement before opening.
Ways to Own a Suburban Studios
Convert an existing hotel. This is the brand’s core path. The franchisor says conversions can reach market in as little as three to four months, far faster than ground-up construction. An owner who already holds a hotel may finance only the conversion, while a buyer finances the purchase and the conversion together. See our page on hotel acquisition financing.
Build new. The cost-optimized prototype suits developers with land in extended-stay demand areas. See our page on hotel construction and start-up financing.
Buy an existing Suburban Studios. Resales replace conversion risk with operating history. The franchisor must approve the transfer, and a change of ownership often triggers an inspection and a required improvement plan. Our article on financing a hotel property improvement plan covers how lenders fund that work.
Financing Options for a Suburban Studios Franchise
SBA 7(a) loans
SBA 7(a) loans can combine a building purchase, conversion work, FF&E and working capital in one loan, which suits a conversion deal. The SBA 7(a) program maximum is currently $5 million, so larger acquisitions or new builds may need a second loan or a different structure.
SBA 504 loans
SBA 504 loans fit long-lived assets such as land, buildings and major renovations. A 504 structure can work well for a new build or for an acquisition where the real estate is most of the cost.
Conventional loans
Conventional business loans suit experienced hotel owners with strong equity and a track record, and may be the only route if a deal falls outside SBA rules.
Equipment financing
In-room kitchens mean refrigerators, cooktops, microwaves, cabinetry and sinks in every unit, plus commercial laundry equipment and guestroom FF&E. Financing these items separately can preserve cash for construction.
Working capital and lines of credit
Converted hotels need cash for payroll, supplies and marketing while occupancy shifts from short stays to longer ones. A hotel working capital loan or credit line can cover that transition.
Seller financing on acquisitions
When buying an existing hotel, a seller may agree to carry part of the price. Seller notes are typically subordinate to the senior loan, and SBA rules may limit how they are structured.
SBA Loans for Suburban Studios Franchisees
For a Suburban Studios franchise loan through the SBA, start with the directory. It lists the brand as Suburban Studios ES under code S1638. The directory carries two notes that shape every SBA deal.
Management agreements. If the owner also uses a third-party management company, the lender or Certified Development Company must review that agreement under SBA rules to decide whether the borrower and the manager are affiliated. The borrower is not eligible if the management company is, or is affiliated with, the franchisor. In plain terms: you can hire an outside manager, but not one connected to the franchisor.
The length-of-stay test. The lender must review revenue under SBA rules. The borrower is eligible only if more than 50% of the prior year’s revenue came from transient guests who stayed 30 days or less at a time; for a start-up, projections must show the same. For an extended-stay hotel this is the critical point, because a property that leans heavily on monthly guests could fail the test.
Application tips. Bring a length-of-stay breakdown from the property’s management system, or a feasibility study that projects it, and our article on SBA loans for hotels lists the other documents hotel lenders expect.
How Lenders Evaluate a Suburban Studios Deal
Personal credit and financial history. Lenders review credit reports, tax returns and personal financial statements for every significant owner.
Net worth and liquidity. Lenders want equity for the injection plus reserves for overruns and ramp-up.
Industry and management experience. Prior hotel ownership or a capable management company carries real weight, especially for a first conversion.
Business plan and feasibility. Projections should reflect economy extended-stay rates, a realistic transition period for a converted property and the length-of-stay mix needed for SBA eligibility.
The FDD and franchise agreement. Lenders read Items 5 through 7, 17 and 21, along with any early-termination and liquidated damages provisions.
The building. For conversions, expect a property condition report, the franchisor’s improvement plan and contractor bids for kitchen work.
For acquisitions: historical financials. Lenders review several years of profit and loss statements, occupancy and rate data, and tax returns.
Kitchen in a Box and Conversion Planning
The franchisor introduced its modular Kitchen in a Box package in spring 2022 to help owners add in-room kitchens without a full rebuild. It says two out of three developers since the relaunch have used it to enter extended stay.
What to price. Get package specifications, lead times and bids for the electrical and plumbing work each room needs.
How lenders treat it. Kitchens can be financed as part of the conversion in an SBA or conventional loan, or separately as equipment.
Multi-Unit Growth and Development Agreements
Owners who succeed with one conversion often look for a second building in the same region. Lenders evaluate each new hotel on its own feasibility and look at the combined debt and cash flow across properties. Our article on multi-unit franchise financing explains how lenders size those later loans.
Real-World Scenarios
The independent motel owner. An owner of an older independent motel with large rooms converts to Suburban Studios, financing kitchens, signage and soft goods through an SBA 7(a) loan.
The buyer and converter. An investor buys a tired transient hotel near an industrial corridor and converts it. The lender finances the purchase and conversion together and reviews the improvement plan before closing.
The first-time hotel owner. A buyer with strong liquidity hires an experienced management company. The SBA lender reviews the management agreement and confirms the manager is not affiliated with the franchisor.
The ground-up developer. A developer with land near a growing employment center builds on the prototype, using an SBA 504 structure for land and construction and separate equipment financing for FF&E.
Common Mistakes to Avoid
- Budgeting from an old FDD instead of the current Item 7
- Underestimating electrical and plumbing work for in-room kitchens
- Projecting so many monthly guests that the property fails the SBA length-of-stay test
- Treating discounted early-year fees as permanent
- Hiring a management company connected to the franchisor on an SBA deal
- Skipping a reserve for appliance replacement
Read more in our article on hotel loan mistakes.
Next Steps to Finance Your Suburban Studios Franchise
Step 1: Request the current FDD. Focus on Items 5, 6, 7, 10, 17 and 21.
Step 2: Choose your path. Decide between converting a hotel you own, buying and converting, buying an existing Suburban Studios or building new.
Step 3: Get the improvement plan and bids. Price kitchens, signage and FF&E with contingency.
Step 4: Model length of stay. Confirm the property can meet the SBA revenue test.
Step 5: Settle management. Decide whether you will self-manage or hire an unaffiliated company.
Step 6: Apply with a financing specialist. Compare SBA 7(a), SBA 504 and conventional structures.
Suburban Studios Franchise Loan FAQs
How much does a Suburban Studios franchise cost?
The 2022 FDD estimated $158,450 to $1,462,895 for an 88-room conversion and $4,544,926 to $8,519,444 for a 117-room new build, both excluding land. Use the current FDD for today’s figures.
What is the Suburban Studios franchise fee?
The affiliation fee is set out in Item 5 of the current FDD and may be negotiated by deal.
What royalty does Suburban Studios charge?
The franchisor says its royalties typically range from 5% to 6% of gross room revenues, with marketing and reservation fees of 3% to 4%. The brand’s exact rates are in Item 6.
How many Suburban Studios hotels are there?
The franchisor reported 115 open hotels with 9,558 rooms, all in the U.S., as of December 31, 2025.
Can I convert my hotel to Suburban Studios?
Yes. The brand is offered mainly through conversions of existing extended-stay hotels and select traditional hotels with larger rooms.
Is Suburban Studios eligible for SBA loans?
Yes. It is on the SBA Franchise Directory under code S1638, subject to the management agreement and length-of-stay notes.
Can I hire a management company?
Yes, but for SBA financing the manager cannot be the franchisor or affiliated with it.
Can I buy an existing Suburban Studios?
Yes, with franchisor approval of the transfer. Expect an inspection and possibly an improvement plan, which can be financed with the purchase.
Does the franchisor offer financing?
The franchisor reports a program that can offer investment, financing and guaranty support to qualified franchisees, and it may offer development incentives. Check Item 10 for what applies to Suburban Studios.
How long is the franchise term?
The franchisor’s U.S. agreements generally run 10 to 30 years; Item 17 gives the Suburban Studios term.
Final Thoughts
A Suburban Studios franchise loan is usually a conversion project, so success depends on an accurate improvement budget, well-planned kitchen work and a guest mix that keeps SBA financing available. Start from the current FDD and plan for a realistic transition period.
US Professional Funding helps hotel owners finance conversions, acquisitions, new construction and working capital. Learn more about our franchise financing programs and our hotel and motel financing solutions.
