How much does a Home2 Suites franchise cost in 2026?
Last updated: By Nate Solomon, Matthews Hotel Markets
Hilton's 2026 Home2 Suites Franchise Disclosure Document, issued March 30, 2026, estimates $18,075,688 to $26,550,592 to open a newly built 107-suite hotel, excluding real estate. The franchise application fee is $100,000, the monthly royalty is 6 percent of gross rooms revenue, the monthly program fee is 3.5 percent, and Hilton Honors is 2.0 percent of total eligible guest folio.[1]
Key takeaways
- Item 7 total: $18,075,688 to $26,550,592 for 107 suites, which is about $168,900 to $248,100 per suite by our arithmetic, before land.[1]
- Ongoing: 6 percent royalty plus 3.5 percent program fee on gross rooms revenue, and a Hilton Honors charge of 2.0 percent of total eligible guest folio.[1]
- A buyer of an existing Home2 Suites pays a $200,000 change of ownership application fee and a $10,000 PIP fee. In 2025 buyers paid $100,000 to $200,000.[1]
- Item 19 adds extended-stay measures: stays of 5 or more nights were about 42 percent of the brand's consumed room nights in 2025.[1]
- The FDD is Hilton's document and its fees change every year. Get the current FDD from Hilton before relying on these figures.
What does a Home2 Suites franchise cost up front?
A $100,000 franchise application fee for a new build or a conversion, under Item 5 of the 2026 Home2 Suites FDD.[1]
Item 5 (pp. 16-17) lists the other initial fees paid to Hilton or its affiliates. A change of ownership application is $200,000 and a re-licensing application is $100,000. The PIP fee, charged to prepare a property improvement plan for a conversion, change of ownership or re-licensing, is $10,000. The OnQ computer system costs $27,606 to $101,971 for hardware, software and installation, other start-up fees are $5,100, training program fees run $5,000 to $17,500, and the opening process services fee is $6,000. If Hilton's supply affiliate furnishes the hotel, its procurement fee is 4 to 10 percent of project cost.[1]
The application fee is refundable, less a $7,500 processing fee, if Hilton denies the application, if the applicant withdraws before approval, or if a change of ownership does not occur (Item 5, Note 1, p. 18).[1]
What are the Home2 Suites royalty and program fees?
The monthly royalty fee is 6 percent of gross rooms revenue and the monthly program fee is 3.5 percent of gross rooms revenue, both due by the 15th of the following month.[1]
Item 6 (p. 21) bases both fees on gross rooms revenue as defined under the Uniform System of Accounts for the Lodging Industry, including loyalty redemption revenue, mandatory guest fees and guaranteed no-show revenue (Note 1, p. 32).[1] Hilton may change the program fee at any time, but the rate will not exceed the current rate plus 1 percent of gross rooms revenue over the term of the agreement (Note 2, p. 32).[1]
Other recurring charges sit on top. Hilton Honors is currently 2.0 percent of total eligible guest folio, waived for stays where the guest enrolls at the property (p. 25). The Hilton Advance fee is 1.35 percent of eligible digital direct revenue, capped at $30 per stay (p. 24).[1] OnQ connectivity is $400 to $600 per month and hardware and software maintenance is $1,060 to $2,553 per month (p. 21).[1] These charges apply to different bases, so they do not add into one percentage.
What does the Item 7 estimate cover, and what is it per suite?
Item 7 of the 2026 Home2 Suites FDD totals $18,075,688 to $26,550,592 for a newly built 107-suite hotel, excluding real estate.[1]
Divided by 107 suites, that is about $168,900 to $248,100 per suite. The division is ours. The FDD does not print a per-suite figure.[1] Construction and leasehold improvements are the largest line at $12,800,000 to $18,555,000, and furniture, fixtures and equipment are $1,910,000 to $2,770,000 (pp. 36-37).[1] The cover page adds that up to $245,471 of the total is paid to Hilton or its affiliates.[1]
Read the exclusions. Item 7 states in capitals that the figures do not include real estate costs, market studies, insurance or interest, and do not separately identify the cost of improvements under a conversion, re-licensing or change of ownership license (p. 37).[1] A buyer of an existing Home2 Suites should expect a PIP scope from Hilton, not an Item 7 number. Per-room pricing is defined at price per key.
What does Hilton report about Home2 Suites performance?
Item 19 of the 2026 Home2 Suites FDD reports a 2025 average room rate of $144.47, average occupancy of 78.0 percent and average RevPAR of $112.63 across 561 comparable U.S. hotels.[1]
Comparable hotels are those open since January 1 of the previous year, excluding hotels that changed brand or ownership type, had large-scale capital projects, or lack comparable results. Of 731 U.S. Home2 Suites hotels at December 31, 2025, 561 were comparable, and 559 of those were franchisee-managed (p. 82).[1] Medians were a $140.77 room rate, 79.1 percent occupancy and $110.67 RevPAR. The ranges were $80.04 to $263.67 for room rate, 46.0 to 97.0 percent for occupancy and $54.43 to $249.29 for RevPAR. Of franchisee-managed hotels, 250, or 44.7 percent, met or exceeded the average RevPAR (pp. 82-83).[1]
The average RevPAR index was 125.1 and the median 127.0, with a range from 69.5 to 243.0, where 100 is a fair share of the competitive set. Hilton cites STR and Hilton as the source and excludes 4 hotels with insufficient data (p. 84).[1] Hilton Honors members accounted for an average 80.4 percent of occupied room nights, with a range from 11.8 to 97.3 percent (pp. 84-85).[1]
Item 19 reports revenue measures only. It gives no expenses, no profit and no return on investment, and none can be derived from it. Hilton writes: "Some hotels have achieved the results shown above. Your individual results may differ. There is no assurance that your Hotel will achieve the results shown above" (p. 87).[1] The measures are defined at RevPAR and MPI, ARI and RGI.
What does the Home2 Suites FDD say about extended stays?
Item 19 defines an extended stay as a completed guest stay of 5 or more consecutive nights and reports that Home2 Suites had about 7.1 million extended stay nights in 2025, about 42 percent of all consumed room nights.[1]
For comparable hotels in 2025, the average room rate on extended stays was $135.52 and the median was $132.28, with a range from $73 to $275 (pp. 85-86).[1] Extended Stay Per Available Room, which Hilton abbreviates ESPAR, measures the percentage of available guest rooms occupied by extended stays. The average was 33.3 percent and the median 32.0 percent, with a range from 7 to 87 percent. Of franchisee-managed comparable hotels, 249, or 44.5 percent, met or exceeded the average (p. 86).[1]
The average length of an extended stay was 11.9 nights and the median 11.0 nights, calculated as total extended stay room nights divided by total extended stays. Extended stays ranged from 6 to 124 nights (pp. 86-87).[1] The same caveat applies: these are results some hotels achieved, with no assurance for any other hotel.[1]
How long is a Home2 Suites franchise agreement, and can I renew it?
Hilton's 2026 Home2 Suites FDD sets the term at generally 22 years from the effective date for new construction and 10 to 20 years from opening for a conversion, with no right to renew.[1]
Item 17 of the 2026 Home2 Suites FDD (p. 72) states that on a change of ownership the term is generally the remaining term under the existing franchise agreement, or another term Hilton approves.[1] The franchisee does not have the right to renew or extend. If Hilton agrees, in its sole discretion, to re-license the hotel, the owner may be asked to sign a contract with materially different terms and must meet any PIP conditions Hilton sets.[1] The re-licensing application fee is $100,000 (Item 6, p. 27).[1]
The franchisee is not authorized to terminate before the term expires. Item 17 treats a unilateral termination without cause as a material breach, and liquidated damages become payable on demand.[1] The contract itself is defined at franchise agreement.
What happens to the Home2 Suites franchise when the hotel is sold?
A sale that changes control of a Home2 Suites is a change of ownership transfer: the seller gives Hilton 60 days' written notice and the buyer applies for a new franchise.[1]
Item 17 of the 2026 Home2 Suites FDD (p. 78) requires the buyer to meet Hilton's then-current requirements for new franchisees, including credit, a background investigation and operations experience. The buyer submits a change of ownership application, pays the franchise application fee ($200,000), signs the then-current form of franchise agreement and agrees to Hilton's requested upgrades, which may include a PIP fee.[1] The seller must not be in default and must pay all amounts due through closing. If the buyer has SBA financing, buyer and seller must agree to escrow Hilton's estimated fees and disburse them at closing.[1]
Permitted transfers are those that do not change control. Transfers of publicly traded equity, and of privately held equity where the transferee holds less than 50 percent afterward, need no notice or consent. Transfers to affiliates, to a family member or trust, or on death need 60 days' written notice, Hilton's consent and a $5,500 processing fee.[1] An owner may mortgage the hotel to a lender that finances its acquisition, development or operation without Hilton's consent if the owner is the sole borrower and the loan is not secured by other hotels or other collateral. A lender comfort letter costs $3,500 (Item 6, p. 27).[1]
Hilton-family hotels on the market are listed at Hilton hotels for sale. The buyer's checklist is at What due diligence do I need before buying a hotel?.
What does it cost to leave Home2 Suites before the term ends?
Hilton's liquidated damages for a Home2 Suites that has been open more than two years are the hotel's average monthly royalty fees multiplied by 60, or by the months remaining in the final 60 months of the term.[1]
Item 6 of the 2026 Home2 Suites FDD (p. 28) sets four cases for a termination by Hilton. Before opening: the system's average monthly royalty fees multiplied by 60. From opening to the second anniversary: the greater of the hotel's average monthly royalty fees multiplied by 60, or the system's average monthly royalty fees multiplied by 60. After the second anniversary and before the final 60 months of the term: the hotel's average monthly royalty fees multiplied by 60. Within the final 60 months: the hotel's average monthly royalty fees multiplied by the number of months remaining.[1]
Note 8 to Item 6 (p. 34) defines the hotel's average as the royalty fees due for the 24 months before the month of termination, divided by 24. The system's average is the average monthly royalty per guest room owed by U.S. Home2 Suites hotels over the prior 12 full calendar months, multiplied by the hotel's approved guest rooms. Fee discounts, ramps and waivers are excluded from the calculation.[1] Opening without Hilton's written authorization costs $5,000 per day.[1] Item 6 states that the monthly royalty fee and liquidated damages are the only fees in the item that are not subject to change.[1]
Does Hilton offer key money on a Home2 Suites?
Hilton may, in its sole discretion, offer a development incentive on a Home2 Suites, and the 2026 FDD calls it a contingent liability, not a loan.[1]
Item 10 of the 2026 Home2 Suites FDD (p. 47) describes an incentive as a financial contribution toward the development or conversion of the hotel, documented by a development incentive note signed with the franchise agreement. It bears no interest and does not have to be repaid unless the franchise terminates before the end of the term or a transfer occurs. The repayable amount falls by an equal share for each year the hotel is open: one-twentieth a year on a 20-year term, in Hilton's example.[1] On a sale, the seller pays the then-current repayable amount unless Hilton permits the buyer to assume the note.[1] The FDD does not publish incentive amounts, and the program can be changed or ended at any time. The term is defined at key money.
How do owners finance Home2 Suites franchise fees, a PIP or a conversion?
Inside the acquisition or construction loan when the costs are part of a purchase or a build, or with a separate renovation loan when they are not.
Lenders size the loan to the hotel's income, and no lender type publishes its leverage limits or spreads. As of September 17, 2026, Prime is 7.00 percent, SOFR is 3.85 percent and the SBA 7(a) maximum allowable rate is 10.00 percent.[2] Item 7 of the Home2 Suites FDD notes that many lenders will require an environmental assessment report.[1] The loan structures are at How do I finance converting my hotel to a new brand? and How do I finance a hotel PIP or renovation?. The wider trade between a flag and independence is at Should I buy a branded or independent hotel?, and the upgrade list itself is defined at PIP.
Whose numbers are these, and how current are they?
Every figure on this page comes from Hilton's 2026 Home2 Suites Franchise Disclosure Document, issued March 30, 2026. It is the franchisor's document, not ours.[1]
The FDD is written by the franchisor, Hilton Franchise Holding LLC, and a prospective franchisee must receive it at least 14 calendar days before signing a binding agreement or paying anything.[1] Hilton reissues it every year and marks most fees "currently", which means they can change. Hilton also reports that it negotiates. It agreed to modify the monthly royalty fee in 32 instances during 2025 (Item 6, p. 32), and in 2025 franchisees paid application fees from $0 to $100,000 for new development or conversion and $100,000 to $200,000 for a change of ownership (Item 5, p. 18).[1]
Get the current FDD from Hilton, and read the franchise agreement attached to it, before you rely on any number here. This page is a neutral fee guide. It does not rank brands or recommend one. The document type is explained at franchise disclosure document, and the other brand guides are listed at How much does a hotel franchise cost?.
Home2 Suites by Hilton franchise fees, 2026 FDD issued March 30, 2026 (Items 5, 6 and 7)
| Fee | Amount | Where in the FDD |
|---|---|---|
| Application fee, new development or conversion | $100,000[1] | Item 5, p. 16 |
| Application fee, change of ownership | $200,000[1] | Item 5, p. 16 |
| Application fee, re-licensing | $100,000[1] | Item 5, p. 16 |
| PIP fee | $10,000[1] | Item 5, p. 16 |
| OnQ system: hardware, software, installation | $27,606 to $101,971[1] | Item 5, p. 17 |
| Monthly royalty fee | 6% of gross rooms revenue[1] | Item 6, p. 21 |
| Monthly program fee | 3.5% of gross rooms revenue. May change, capped at the current rate plus 1%[1] | Item 6, pp. 21 and 32 |
| Hilton Honors | 2.0% of total eligible guest folio[1] | Item 6, p. 25 |
| Hilton Advance fee | 1.35% of eligible digital direct revenue, up to $30 per stay[1] | Item 6, p. 24 |
| OnQ connectivity, and hardware and software maintenance | $400 to $600 and $1,060 to $2,553 per month[1] | Item 6, p. 21 |
| Room addition fee | $400 per added guest room or suite[1] | Item 6, p. 21 |
| Permitted transfer processing fee | $5,500[1] | Item 6, p. 27 |
| Lender comfort letter | $3,500, and $1,500 for an assignment[1] | Item 6, p. 27 |
| Liquidated damages, after year 2 | Hotel's average monthly royalty fees x 60, or x months remaining in the final 60 months[1] | Item 6, pp. 28-29 |
| Estimated initial investment, 107 suites | $18,075,688 to $26,550,592, excluding real estate[1] | Item 7, p. 37 |
Worked example
Hypothetical: one year of Home2 Suites brand fees on assumed rooms revenue
Hypothetical. Assume a Home2 Suites earns $3,000,000 of gross rooms revenue in a year, and that $1,200,000 of guest folios are eligible Hilton Honors folios. Both figures are assumptions chosen for round arithmetic. They are not forecasts and they are not from the FDD.
Monthly royalty fee at 6 percent: $3,000,000 x 0.06 = $180,000.[1]
Monthly program fee at 3.5 percent: $3,000,000 x 0.035 = $105,000.[1]
Hilton Honors at 2.0 percent of eligible folio: $1,200,000 x 0.02 = $24,000.[1]
OnQ connectivity plus hardware and software maintenance: $1,460 to $3,153 per month, or $17,520 to $37,836 a year.[1]
Total of these four lines: $326,520 to $346,836. Hilton Advance fees, third-party reservation charges, travel planner commissions, training and guest assistance charges are extra and depend on how guests book, so they are left out. The example shows fees only. It says nothing about profit.
Frequently asked
- What are Home2 Suites franchise fees?
- Under Hilton's 2026 FDD, issued March 30, 2026: a $100,000 application fee, a 6 percent monthly royalty and a 3.5 percent monthly program fee on gross rooms revenue, and Hilton Honors at 2.0 percent of total eligible guest folio.[1]
- How much does it cost to build a Home2 Suites?
- Hilton estimates $18,075,688 to $26,550,592 for a newly built 107-suite hotel, excluding real estate, market studies, insurance and interest. Up to $245,471 of that is paid to Hilton or its affiliates.[1]
- I'm buying an existing Home2 Suites. What will Hilton charge me?
- A $200,000 change of ownership application fee and a $10,000 PIP fee, under the 2026 FDD. You sign Hilton's then-current franchise agreement and agree to its requested upgrades. In 2025, buyers paid $100,000 to $200,000.[1]
- How long does a Home2 Suites franchise last?
- Generally 22 years from the effective date for new construction and 10 to 20 years from opening for a conversion. A buyer generally takes the remaining term or another term Hilton approves. There is no right to renew.[1]
- How much does a Home2 Suites owner make?
- The FDD does not say. Item 19 reports room rate, occupancy, RevPAR, RevPAR index, Hilton Honors contribution and extended-stay measures for comparable hotels. It reports no expenses or profit, and Hilton states there is no assurance any hotel will achieve the results shown.[1]
- How much of Home2 Suites business is extended stay?
- Hilton reports about 7.1 million extended stay nights in 2025, about 42 percent of all consumed room nights, counting stays of 5 or more consecutive nights. The average extended stay at comparable hotels was 11.9 nights.[1]
- What does it cost to terminate a Home2 Suites franchise early?
- After the second anniversary of opening, liquidated damages are the hotel's average monthly royalty fees multiplied by 60, or by the months remaining in the final 60 months of the term.[1]
Who wrote this
Hospitality Associate, Matthews Hotel Markets
(512) 839-6999nate.solomon@matthews.comLinkedIn
Reviewed by Luke Thompson, VP & Director, Capital Markets.
Sources
- 2026 Home2 Suites by Hilton Franchise Disclosure Document (issued March 30, 2026): cover page; Item 5, pp. 16-20; Item 6, pp. 21-36; Item 7, pp. 36-40; Item 10, pp. 46-47; Item 17, pp. 72-81; Item 19, pp. 81-88 · Hilton Franchise Holding LLC · accessed September 18, 2026
- Matthews Hotel Markets September 2026 rate sheet · Matthews Hotel Markets · accessed September 18, 2026
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Terms defined in the glossary
Our own data
Matthews Hotel Markets sells and finances franchised hotels, so we read these disclosure documents alongside owners and buyers.