Extended Stay America Franchising in 2026: Fees, Conversion Cost, Premier and Select Suites Builds, and How Owners Finance Them

Extended Stay America franchises three brands in 2026 on one fee schedule: a $50,000 initial fee, a 5.5% royalty and a 4.5% system services fee, per the Lodging 2026 Guide to Franchising as of March 31, 2026. ESA Suites is the conversion brand, with a conversion budget summarized at $211,400 to $3,973,330. Select Suites is the economy new-build brand at about $8.6 million to $13.3 million for a 123-room hotel before land. Premier Suites is the midscale new build at about $10.1 million to $15.1 million on a 125-room prototype. ESA provides its franchise disclosure documents through its development team, so those cost figures, which are third-party summaries, should be confirmed against the current document.

Owners finance a conversion with SBA 7(a), a Bridge direct PIP loan or a bank term loan. They finance a new build with a construction loan at 55% to 70% of cost, a C-PACE layer and 25% to 35% equity, or with SBA 504 at 15% to 20% equity. All three brands are on the SBA Franchise Directory. The brand's case to a lender is performance data the newer extended-stay flags do not have. Premier Suites averaged 76% occupancy, about a $91 ADR and about $69 of RevPAR across 49 hotels in 2025, and the parent runs 657 hotels, 488 of them corporate, which gives every market a comp set. On a 123-room Select Suites at $12.5 million all-in, the worked example below lands an $8 million senior loan at 64% of cost. This guide gives the fees, the costs by brand, the counts, the SBA position, the lenders, the sizing and two worked deals. Bridge lends directly on construction from $10 million to $50 million and structures smaller loans with the right bank or SBA lender; the owner-operator rules and lender list are in the best SBA lenders for hotels.

Key takeaways

• Fees on all three ESA brands: $50,000 initial, 5.5% royalty, 4.5% system services (Lodging 2026 guide).
• Select Suites new build about $8.6M to $13.3M before land; Premier about $10.1M to $15.1M (third-party).
• Premier Suites 2025: 76% occupancy, about $91 ADR and $69 RevPAR across 49 hotels.
• SBA approved: Suites S5432, Premier S8548, Select S8549, with the extended-stay transient test.
• Franchised counts (March 2026): Suites 122, Select 20, Premier 27, beside 488 corporate hotels.

What are the Extended Stay America franchise fees?

From the Lodging 2026 Guide to Franchising, figures as of March 31, 2026: a $50,000 initial fee, a 5.5% royalty and a 4.5% system services fee on each brand. ESA's own Premier brand book describes "a royalty fee of 5% and service contributions of 5%," a different split of the same 10%; use the Lodging schedule and confirm against the FDD.

The 10% combined load sits above WoodSpring's 8.5% (6% plus 2.5%), Everhome's 9% bundle and LivSmart's 8.5%, and matches City Express's bundle of roughly 10.5% at the top of the economy and midscale extended-stay range. What it buys is a system of 657 hotels and a franchisor that operates 488 of them. That is why ESA's performance data is deeper than any other extended-stay franchisor's: the brand runs the product it franchises.

What does an ESA conversion or new build cost?

Select Suites is the lowest-cost new-build extended-stay prototype in the market at $70,000 to $108,000 per key, under WoodSpring's $72,400 to $119,400. Premier at $80,000 to $121,000 undercuts Everhome ($112,000 to $141,000) and StudioRes ($113,000 to $150,000) by 15% to 30%. Both are well under HVS's $170,000 to $197,000 median for limited-service and midscale extended-stay hotels. Add land (about two acres), contingency and an interest reserve, and a Select lands at $85,000 to $125,000 per key all-in and a Premier at $95,000 to $140,000. The conversion range is wide because ESA Suites accepts a wide range of existing extended-stay and economy buildings; the Suites brand's 122 franchised hotels are mostly former corporate ESAs and converted competitors. The segment comparison is in the cost per key of an economy extended-stay hotel.

How do ESA hotels perform?

Premier Suites is the brand with published data. Its 2025 Item 19 is the highest RevPAR of any economy-to-midscale extended-stay brand with disclosed results.

The segment's structural case, an occupancy premium of about 12 points over the industry in 2025 and the smallest RevPAR losses in the downturn, driven by residential demand that has declined only once in 27 years, is what ESA's corporate portfolio demonstrates at scale. For a lender, Premier's RevPAR of about $69 is a usable pro forma anchor; Select and Suites underwrite to the economy extended-stay band of $50 to $60.

Are ESA brands SBA approved?

Yes, all three. The SBA Franchise Directory effective October 15, 2026 lists Extended Stay America Suites as S5432 (since May 2020) and Premier Suites and Select Suites as S8548 and S8549 (both added January 16, 2026). Each carries the hotel manager-affiliation condition and the extended-stay transient test, which requires more than 50% of revenue from guests staying 30 days or less. The test is the one to watch on an ESA. The brand's 12-plus-night average stays are its strength, and a hotel that leans on monthly guests can fail it even with the flag.

The 2026 rules otherwise:

• A 7(a) runs to $5 million at a rate capped at 10.00%, which is prime plus 3.00 points.
• A 504 pairs a bank first mortgage with a 6.97% fixed debenture capped at $5.5 million and 15% to 20% equity on a hotel, combinable to $10 million.
• Every owner must be a U.S. citizen or national since March 1, 2026.

Because a Select or Premier build is usually $11 million to $16 million, the 504 fits most of them. The rules and brand table are in the SBA Franchise Directory check for hotel brands.

Who finances an ESA conversion or build?

Bridge closed more than $500 million of hotel loans in 2025 and charges a 50-basis-point placement fee on acquisitions and refinances of $10 million or more. Market terms for banks and debt funds are from the Crittenden 2026 hotel lending survey. ESA publishes no key money program and, unlike Choice, Hilton and Wyndham, does not disclose forgivable development notes; the franchisor's contribution is the corporate comp set and the conversion pipeline from its own portfolio.

How do lenders size an ESA loan?

Off stabilized NOI. In the example, a 123-room Select Suites runs 77% occupancy and a $66 ADR, about $51 of RevPAR. The stack from there:

• Room revenue: 123 rooms at about $51 of RevPAR is about $2.28 million a year.
• Total revenue with other income: about $2.33 million.
• Deductions: the 10% fee load, a 4% FF&E reserve, a small extended-stay payroll and property taxes.
• NOI at a 43% margin: about $1.0 million.

Both ESA builds reach the loan-to-cost cap on their own NOI, which only WoodSpring and Home2 also do in this segment; the low cost per key is what makes a 10% fee load financeable. The requirements and draw process are in hotel construction loans in 2026.

Worked example 1: converting a 100-room economy hotel to ESA Suites

An owner-operator buys an unflagged 100-room extended-stay hotel for $4.2 million and converts it at $1.1 million (mid-range of the summarized conversion budget, including the $50,000 fee), with $100,000 of closing and working capital: $5.4 million.

Annual debt service is about $520,000. Pre-conversion NOI of $560,000 covers 1.08x, allowed on an acquisition the real estate secures with 1.25x reached within two years; post-conversion at $55 of RevPAR and ESA's distribution, NOI of about $740,000 covers 1.42x. The transient test is satisfied in projections.

Worked example 2: building a 123-room Select Suites

Building cost $11 million (mid-range), land $1.5 million, $12.5 million all-in, $102,000 per key.

Permanent debt service of about $678,000 on the senior loan and $133,000 on the assessment gives 1.23x at $1.0 million of NOI. For an owner-operator, a 504 at 50/35/15 carries a $4.4 million debenture, a $6.25 million bank first and $1.9 million of equity. The WoodSpring comparison at the same cost per key is in how to finance a WoodSpring Suites.

When is an ESA franchise the wrong tool?

• Avoid it if your guests stay by the month. The SBA transient test and the brand's model both assume stays of 30 days or less dominate.
• Avoid budgeting from the third-party FDD summaries. Get the 2026 FDDs from ESA; the royalty and services split is reported two ways.
• Avoid a Premier pro forma above $75 of RevPAR without a comp set; about $69 is the 2025 average.
• Avoid SBA if any owner is a lawful permanent resident or a third party manages the hotel with full discretion.
• Avoid a market where an ESA corporate hotel already sits within five miles. The franchisor runs 488 of its own; expect an impact review before it signs.