Best Financing Options for Choice Hotels Owners in 2026: Fees, Costs, Incentives and Lenders by Brand

The best financing option for a Choice Hotels (Choice) owner in 2026 depends on the project. A conversion to Comfort or Quality under $5 million fits an SBA 7(a) loan. A new WoodSpring, Everhome or Comfort build fits an SBA 504 or a construction loan with a C-PACE layer. A stabilized refinance fits a CMBS or bank loan, and Choice's own forgivable incentives sit on top of any of them. Bridge, Choice's financing partner since January 2025, charges Choice franchisees a 0.50% placement fee on acquisition and refinance loans of $10 million or more, against the 1% to 1.5% typical for hotel placements, and lends directly on construction and PIP loans.

The brand's own numbers set the frame. Choice's 2026 franchise disclosure documents put a new 89-room Comfort Inn at $10.3 million to $16.3 million before land, with the WoodSpring and Everhome build costs in the table below. Royalties run 6% on the core brands with a 3.5% marketing and reservation fee. Choice paid $83.4 million of franchise-agreement acquisition costs, its key money, in 2025. This guide gives the fees, build costs, incentives and SBA codes by brand, then matches each project type to its lenders at October 2026 rates and walks a $5.35 million Comfort conversion.

Key takeaways

• Choice owners pay a 0.50% placement fee through Bridge on $10M+ loans, against 1% to 1.5% elsewhere.
• Core-brand fees: 6% royalty, 3.5% marketing and reservation; WoodSpring 2.5%; Everhome a 9% bundle.
• Every Choice brand is on the SBA Franchise Directory; Comfort is code S0410.
• Choice's Incentive Program pays $2,500 to $3,000 per room, forgivable over 10 years, on qualifying deals.
• Choice spent $83.4M on key money in 2025 and is tying 2026 key money to improvement plans.

What does it cost to own a Choice Hotels franchise in 2026?

The table is from the 2026 FDDs issued April 1, 2026 (Comfort, Country Inn & Suites, WoodSpring, Everhome) and Choice's FY2025 10-K; Cambria's 2026 FDD is not publicly registered, so its fees are the 2025 Lodging guide figures. Rows marked "third-party summary" or "2025 guide" are not from a 2026 FDD. Build costs exclude land and, for Country Inn & Suites, site work and general contractor fees.

The fee that catches owners is the loyalty charge, which sits outside the royalty: the Choice Privileges Rewards Program Fee is 4.5% to 5.5% of room revenue from members, performance-based, plus a 3% Choice Accelerate fee on direct online bookings and 5% on airline-program stays. On a Comfort with 45% of revenue from members, that adds roughly 2.3 points to the 9.5% base, so model 12% of room revenue in total fees. Across its U.S. system Choice's average royalty rate was 5.14% in 2025 and 5.22% in the first quarter of 2026, below the 6% headline because of incentives and legacy agreements.

What incentives does Choice offer owners?

Three, and they are larger than most owners realize.

• Selected Capital Support. Discretionary key money for properties Choice considers strategic, documented by a note, funded shortly after opening and forgiven straight-line over the franchise term; owners sign personally and waive Choice's without-cause termination rights at years 10 and 15. Choice's franchise-agreement acquisition costs were $83.4 million in 2025 and $72.2 million in the first half of 2026 against $41.5 million a year earlier; on its second-quarter call management said 2026 key money would run $15 million to $20 million above plan and be tied more closely to improvement plans.
• The Incentive Program for veterans and underrepresented owners holding at least 51%: $2,500 per room up to $250,000 on Comfort and Country Inn & Suites, $3,000 per room up to $300,000 on Everhome, as a 10-year forgivable note, or a 5-year note at half the amount, plus a 50% affiliation-fee discount on re-licensing.
• Procurement and prototype savings. The 2025 Rise & Shine update cut Comfort FF&E cost about 16% and added three keys to the prototype; Choice said in August 2026 it had cut prototype costs by up to 25% across its midscale brands and launched an FF&E procurement program expected to save owners up to 20% on average.

The Comfort FDD also names two lenders Choice works with directly, per the FDD's own list rather than any Bridge recommendation: Ascentium Capital for equipment, PIP and brand-standard loans of $5,000 to $500,000 over 12 to 72 months, and PMC Commercial Trust for conventional and SBA loans of $500,000 to $5 million at 70% to 85% of collateral.

Which loan fits each Choice project?

Rates are as of October 23, 2026: WSJ prime 7.00%, 1-month Term SOFR 3.92%, the 10-year Treasury 5.00%, the SBA 504 25-year debenture at a 6.97% effective rate, and 10-year hotel CMBS at 6.83% to 7.33% fixed per Northmarq. Loan sizes are Bridge's published ranges for Choice owners.

The table's obvious pick is not always right. A 7(a) on a conversion is the wrong tool when any owner holds a green card, and CMBS on a refinance is the wrong tool when a PIP falls due inside 36 months, because the conduit sweeps cash to 115% of its cost. Two 2026 rule changes widen the SBA path for Choice owners. A borrower can now hold $5 million of 7(a) and $5 million of 504 loans at once, so a $9 million Comfort conversion can split the real estate onto a 504 and the PIP and FF&E onto a 7(a). And every owner must be a U.S. citizen or national under the March 1, 2026 rule, which moves some Choice owners to conventional or debt fund capital. Every Choice brand is on the SBA Franchise Directory; the lender enters the code (Comfort S0410, Cambria S0336, WoodSpring S1944, Everhome S5097, Country Inn & Suites S0431) and the listing's one condition is that any management company be unaffiliated with Choice. The full brand table is in the SBA Franchise Directory check for hotel brands.

How does the Bridge and Choice Hotels partnership work?

Choice named Bridge its financing partner on January 28, 2025, giving franchisees one request that reaches Bridge's direct capital and its network of banks, SBA lenders, CMBS conduits, debt funds and C-PACE providers. Since October 1, 2026 Choice owners pay a 0.50% placement fee on hotel acquisition and refinance loans of $10 million or more, with no separate origination or underwriting fee, against the 1% to 1.5% typical for hotel placements. The lender's coupon is the coupon you pay. Bridge closed more than $500 million of hotel loans in 2025, including a $10.45 million construction loan on a 122-key WoodSpring Suites and a $5.3 million Comfort Suites acquisition that drew three term sheets in 10 days and closed in 45 days.

The process is three steps: the owner submits the request, Bridge builds the offering memorandum and deal room, and lenders return indicative term sheets. Owners can block their current lender from seeing the deal.

Worked example: a $5.35 million Comfort Inn conversion

You buy an unflagged 100-room hotel for $4 million, sign a Comfort agreement ($50,000 affiliation fee) and fund a $1.2 million conversion PIP plus $100,000 of closing costs and working capital.

Annual debt service is about $515,000. At the Rise & Shine prototype average of $69.35 RevPAR the hotel books about $2.5 million of revenue and roughly $880,000 of NOI after fees and reserves, a 1.71x cover; at the brand-wide $64.28 it is about $800,000, 1.55x, still above the lender's 1.25x. Choice's Incentive Program, if you qualify, adds $250,000 of forgivable capital that replaces most of the equity. If the purchase price were $6.5 million, the loan would pass $5 million and the structure becomes a 504 for the real estate plus a 7(a) for the PIP.

For a renovation on a hotel you already own, the same PIP can be funded three ways: a 7(a) up to $5 million, a Bridge direct PIP loan starting at $500,000, or a C-PACE assessment on the HVAC, lighting and envelope scope. Choice's timeline is the constraint: the brand contacts owners about 18 months before a contractual out date, and if a PIP is not executed 12 months before that date Choice may issue a notice of termination, rescindable by signing the PIP addendum within 30 days. The options are compared in hotel PIP financing options.

How is the Choice system performing?

Choice's U.S. system ended 2025 with 6,187 hotels and 496,979 rooms, per its FY2025 10-K. By brand, Comfort had 1,652 hotels, Quality 1,571, Econo Lodge 599 and Rodeway 432. Sleep Inn had 404, Country Inn & Suites 402, WoodSpring 284, Cambria 76 and Everhome 25. In the same 10-K, U.S. RevPAR was $52.85 in 2025, down 3.0%, with occupancy at 55.6%; the company guided U.S. RevPAR to flat to up 1.25% for 2026 and reported a 1.3% gain in the second quarter. Extended-stay rooms grew 11.7% in 2025 and are 39% of the pipeline, which is why WoodSpring and Everhome get the richest incentives.

When is a Choice-specific financing path the wrong tool?

• Avoid SBA if any owner is a lawful permanent resident. The March 2026 rule makes the loan ineligible regardless of brand.
• Avoid a new Comfort build on a site with RevPAR under $75. At the Rise & Shine average of $69.35, a $12.7 million build covers debt only about 1.15x; the coverage math is in how much it costs to build a Comfort Inn.
• Avoid counting on key money before the franchise agreement is signed. Choice's Selected Capital Support is discretionary and funds after opening.
• Avoid CMBS on a hotel with a PIP due inside 36 months. The 2026 conduits sweep cash to 115% of the PIP cost.
• Avoid Everhome's 9% bundled fee math on a WoodSpring pro forma. WoodSpring's 8.5% total (6% plus 2.5%) is the lowest fee stack among the new-build brands; Everhome's bundle buys a midscale rate.