Franchise or Independent?

Wyndham, Choice, IHG & When a Flag Adds (or Doesn’t Add) Value

What a flag buys you: national reservation engines, loyalty networks, brand standards, PIP discipline, and sales support that can produce durable RevPAR premiums—especially in softer demand cycles. Academic and industry research consistently shows branded hotels outperform independents on RevPAR and NOI when demand weakens. eCommons+1

The price of admission: ongoing royalties (often ~5% or more) plus marketing/assessment fees, QA costs, technology subscriptions, and PIP compliance (initial and ongoing). Item 6 in FDDs details these fees for each system; IHG, Choice, and Wyndham disclose pre-opening and recurring program fees that owners must budget from day one. Entrepreneur+2USA+2

When brands win (most of the time):

• Transient-heavy, drive-to markets where loyalty capture matters.

• New builds or heavy PIP conversions that reset product to brand spec.

• Owner without deep local sales engine—brand fills the pipeline gap. eCommons

When independent can beat a flag:

• Unique supply (boutique, historic, experiential) where ADR lift from design/food & beverage exceeds loyalty capture.

• Fee drag outweighs premium in small markets with sticky repeat demand.

• Owners with proven direct-booking content, SEO, and local partnerships who can replace brand channel mix at lower cost. ScienceDirect

Investor takeaway: Model both paths. Build two P&Ls—(1) with brand fees + expected RevPAR premium, (2) independent with higher sales/marketing spend—and compare stabilized NOI after fees and yield on cost. Use the FDD Item 6/7 line items for accurate fee loads and anticipated PIP.