# EDGAR Filing Document

**Accession Number:** 0001046311
**File Stem:** 0001046311-26-000008
**Filing Date:** 2026-2
**Character Count:** 573842
**Document Hash:** 93e4d7f2a010bdc313537d11c49b95d7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001046311-26-000008.hdr.sgml**: 20260219

**ACCESSION NUMBER**: 0001046311-26-000008

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 125

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260219

**DATE AS OF CHANGE**: 20260219

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CHOICE HOTELS INTERNATIONAL INC /DE
- **CENTRAL INDEX KEY:** 0001046311
- **STANDARD INDUSTRIAL CLASSIFICATION:** HOTELS & MOTELS [7011]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 521209792
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-13393
- **FILM NUMBER:** 26653101

**BUSINESS ADDRESS:**
- **STREET 1:** 915 MEETING STREET
- **STREET 2:** SUITE 600
- **CITY:** NORTH BETHESDA
- **STATE:** MD
- **ZIP:** 20852
- **BUSINESS PHONE:** 3015925000

**MAIL ADDRESS:**
- **STREET 1:** 915 MEETING STREET
- **STREET 2:** SUITE 600
- **CITY:** NORTH BETHESDA
- **STATE:** MD
- **ZIP:** 20852

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHOICE HOTELS FRANCHISING INC
- **DATE OF NAME CHANGE:** 19971118

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHOICE HOTELS INTERNATIONAL INC/
- **DATE OF NAME CHANGE:** 19971022

?xml version='1.0' encoding='ASCII'? chh-20251231

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

_______________________________________________________________________

**FORM 10-K** 

_______________________________________________________________________

**(Mark One)**

**☒** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025** 

**OR**

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**

**Commission file number 001-13393** 

___________________________________________________________________________

**CHOICE HOTELS INTERNATIONAL, INC.** 

**(Exact Name of Registrant as Specified in Its Charter)**

 **__________________________________________________________________________** 

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| | |
|:---|:---|
| **Delaware** | **52-1209792** |
| **(State or other jurisdiction<br>of incorporation)** | **(IRS Employer<br>Identification Number)** |

---

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| | | |
|:---|:---|:---|
| **915 Meeting Street** | **915 Meeting Street** | **20852** |
| **Suite 600** | **Suite 600** | **20852** |
| **North Bethesda,** | **Maryland** | **20852** |
| **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Zip Code)** |

---

**Registrant's telephone number, including area code (301) 592-5000** 

&nbsp;&nbsp;&nbsp;&nbsp;**______________________________________________________________________** 

**Securities registered pursuant to Section 12(b) of the Act:**

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| | | |
|:---|:---|:---|
| **<u>Title of Each Class</u>** | **<u>Trading Symbol(s)</u>** | **<u>Name of Each Exchange on Which Registered</u>** |
| **Common Stock, Par Value $0.01 per share** | **CHH** | **New York Stock Exchange** |

---

**Securities registered pursuant to Section 12(g) of the Act: None**

**_______________________________________________________________________** 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act:

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
| Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | ☒ |
| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | ☐ |
| Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). | Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). | Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). | ☐ |

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). &nbsp;&nbsp;&nbsp;&nbsp;Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

The aggregate market value of common stock of Choice Hotels International, Inc. held by non-affiliates was $3,445,513,422 as of June 30, 2025 based upon a closing price of $126.88 per share.

As of February 10, 2026, the number of shares outstanding of Choice Hotels International, Inc.'s common stock was 45,971,393.

**DOCUMENTS INCORPORATED BY REFERENCE.**

Certain portions of our definitive proxy statement, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Annual Meeting of Shareholders to be held on May 21, 2026, are incorporated by reference under Part III of this Form 10-K.

------

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**CHOICE HOTELS INTERNATIONAL, INC.**

**Form 10-K**

**Table of Contents**

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| | | | |
|:---|:---|:---|:---|
| | | | **Page No.** |
| **Part I** | | | |
| | Item 1. | <u>[Business](#i3b6e36adc65c4bfb8037f9d58cf59e61_22)</u> | <u>[3](#i3b6e36adc65c4bfb8037f9d58cf59e61_22)</u> |
| | Item 1A. | <u>[Risk Factors](#i3b6e36adc65c4bfb8037f9d58cf59e61_61)</u> | <u>[21](#i3b6e36adc65c4bfb8037f9d58cf59e61_61)</u> |
| | Item 1B. | <u>[Unresolved Staff Comments](#i3b6e36adc65c4bfb8037f9d58cf59e61_64)</u> | <u>[32](#i3b6e36adc65c4bfb8037f9d58cf59e61_64)</u> |
| | Item 1C. | <u>[Cybersecurity](#i3b6e36adc65c4bfb8037f9d58cf59e61_67)</u> | <u>[32](#i3b6e36adc65c4bfb8037f9d58cf59e61_67)</u> |
| | Item 2. | <u>[Properties](#i3b6e36adc65c4bfb8037f9d58cf59e61_70)</u> | <u>[34](#i3b6e36adc65c4bfb8037f9d58cf59e61_70)</u> |
| | Item 3. | <u>[Legal Proceedings](#i3b6e36adc65c4bfb8037f9d58cf59e61_73)</u> | <u>[34](#i3b6e36adc65c4bfb8037f9d58cf59e61_73)</u> |
| | Item 4. | <u>[Mine Safety Disclosures](#i3b6e36adc65c4bfb8037f9d58cf59e61_76)</u> | <u>[34](#i3b6e36adc65c4bfb8037f9d58cf59e61_76)</u> |
| **Part II** | | | |
| | Item 5. | <u>[Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i3b6e36adc65c4bfb8037f9d58cf59e61_82)</u> | <u>[35](#i3b6e36adc65c4bfb8037f9d58cf59e61_82)</u> |
| | Item 6. | <u>[Reserved](#i3b6e36adc65c4bfb8037f9d58cf59e61_85)</u> | <u>[37](#i3b6e36adc65c4bfb8037f9d58cf59e61_85)</u> |
| | Item 7. | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i3b6e36adc65c4bfb8037f9d58cf59e61_88)</u> | <u>[37](#i3b6e36adc65c4bfb8037f9d58cf59e61_88)</u> |
| | Item 7A. | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i3b6e36adc65c4bfb8037f9d58cf59e61_106)</u> | <u>[52](#i3b6e36adc65c4bfb8037f9d58cf59e61_106)</u> |
| | Item 8. | <u>[Financial Statements and Supplementary Data](#i3b6e36adc65c4bfb8037f9d58cf59e61_109)</u> | <u>[53](#i3b6e36adc65c4bfb8037f9d58cf59e61_109)</u> |
| | Item 9. | <u>[Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i3b6e36adc65c4bfb8037f9d58cf59e61_220)</u> | <u>[93](#i3b6e36adc65c4bfb8037f9d58cf59e61_220)</u> |
| | Item 9A. | <u>[Controls and Procedures](#i3b6e36adc65c4bfb8037f9d58cf59e61_223)</u> | <u>[93](#i3b6e36adc65c4bfb8037f9d58cf59e61_223)</u> |
| | Item 9B. | <u>[Other Information](#i3b6e36adc65c4bfb8037f9d58cf59e61_226)</u> | <u>[96](#i3b6e36adc65c4bfb8037f9d58cf59e61_226)</u> |
| | Item 9C. | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i3b6e36adc65c4bfb8037f9d58cf59e61_232)</u> | <u>[96](#i3b6e36adc65c4bfb8037f9d58cf59e61_232)</u> |
| **Part III** | | | |
| | Item 10. | <u>[Directors, Executive Officers and Corporate Governance](#i3b6e36adc65c4bfb8037f9d58cf59e61_238)</u> | <u>[96](#i3b6e36adc65c4bfb8037f9d58cf59e61_238)</u> |
| | Item 11. | <u>[Executive Compensation](#i3b6e36adc65c4bfb8037f9d58cf59e61_244)</u> | <u>[96](#i3b6e36adc65c4bfb8037f9d58cf59e61_244)</u> |
| | Item 12. | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i3b6e36adc65c4bfb8037f9d58cf59e61_247)</u> | <u>[97](#i3b6e36adc65c4bfb8037f9d58cf59e61_247)</u> |
| | Item 13. | <u>[Certain Relationships and Related Transactions and Director Independence](#i3b6e36adc65c4bfb8037f9d58cf59e61_253)</u> | <u>[97](#i3b6e36adc65c4bfb8037f9d58cf59e61_253)</u> |
| | Item 14. | <u>[Principal Accounting Fees and Services](#i3b6e36adc65c4bfb8037f9d58cf59e61_256)</u> | <u>[97](#i3b6e36adc65c4bfb8037f9d58cf59e61_256)</u> |
| **Part IV** | | | |
| | Item 15. | <u>[Exhibits, Financial Statement Schedules](#i3b6e36adc65c4bfb8037f9d58cf59e61_262)</u> | <u>[97](#i3b6e36adc65c4bfb8037f9d58cf59e61_262)</u> |
| | Item 16. | <u>[Form 10-K Summary](#i3b6e36adc65c4bfb8037f9d58cf59e61_265)</u> | <u>[102](#i3b6e36adc65c4bfb8037f9d58cf59e61_265)</u> |
| | | <u>[SIGNATURE](#i3b6e36adc65c4bfb8037f9d58cf59e61_268)</u> | <u>[103](#i3b6e36adc65c4bfb8037f9d58cf59e61_268)</u> |

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**PART I**

Throughout this report, we refer to Choice Hotels International, Inc., together with its subsidiaries as "Choice," the "Company," "we," "us," or "our."

**Forward-Looking Statements**

Certain matters discussed in this report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume," or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which, in turn, are based on information currently available to management. Such statements may relate to projections of our revenue, expenses, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock, and other financial and operational measures, including occupancy and open hotels, revenue per available room, and our liquidity, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

Several factors could cause our actual results, performance or achievements to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, U.S. and foreign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future U.S. or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to the status of our relationship with employees of our franchisees; the potential impact of new laws and regulations generally, including, without limitation, those relating to taxes, wages, labor and immigration; foreign currency fluctuations; changes in global interest rates and rate differentials; variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; the federal government funding lapse and related government shutdowns; impairments or declines in the value of our assets; our assumptions underlying our critical accounting estimates; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for our marketing and reservation systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, franchise agreement acquisition costs and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; the impact of inflation; cyber security and data breach risks; introduction and integration of artificial intelligence technologies; climate change; our sustainability strategy; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations; political instability, conflicts and terrorism; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness. These and other risk factors are discussed in detail in Item 1A. Risk Factors of this Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

**WHERE YOU CAN FIND MORE INFORMATION**

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission ("SEC"). Our SEC filings are available to the public over the internet at the SEC's website at http://www.sec.gov. Our SEC filings are also available free of charge at the "Investor Relations **–** Financials" section of our website at http://www.choicehotels.com as soon as reasonably practicable following the time that they are filed with or furnished to the SEC. Information on or connected to our website is neither part of nor incorporated by reference into this Annual Report on Form 10-K or any other SEC filings.

**Item 1. Business**

***Overview***

We are primarily a hotel franchisor operating in 49 states, the District of Columbia, and 50 countries and territories. As of December 31, 2025, we had 7,575 hotels with 656,825 rooms open and operating, and 825 hotels with 77,862 rooms under construction, awaiting conversion or approved for development, or committed to future franchise development on outstanding

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

master development agreements (collectively, "pipeline") in our global system. Our brand names include Clarion®, Clarion Pointe™, Comfort Inn®, Comfort Suites®, Country Inn & Suites® by Radisson, Sleep Inn®, Quality®, Park Inn by Radisson®, Everhome Suites®, WoodSpring Suites®, MainStay Suites®, Suburban Studios™, Radisson Blu®, Park Plaza®, Cambria® Hotels, Ascend Collection®, Radisson RED®, Radisson Individuals®, Radisson®, Radisson Collection®, Radisson Inn & Suites<sup>SM</sup>, Econo Lodge®, and Rodeway Inn®.

The hotel franchising business represents the Company's primary operations. The Company's U.S. operations are primarily conducted through direct franchising relationships, the ownership of 10 Cambria, four Everhome Suites, one Radisson RED, one Radisson Blu, and one Country Inn & Suites open and operating hotels, and the management of 13 hotels (inclusive of four owned hotels), while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships. Master franchising relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee. As a result of our master franchise relationships and international market conditions, our revenues are primarily concentrated in the U.S. Therefore, our description of our business is primarily focused on the U.S. operations.

Our Company generates revenues, income, and cash flows primarily from our hotel franchising operations. Revenues are also generated from partnerships with qualified vendors and travel partners that provide value-added solutions to our platform of guests and hotels, hotel ownership, and other ancillary sources. Historically, the hotel industry has been seasonal in nature. For most hotels, demand is typically lower in November through February than during the remainder of the year. Our principal source of revenue is franchise fees, which is based on the gross room revenues or the number of rooms at our franchised properties. The Company's franchise and managed fees, as well as its owned hotels' revenues, normally reflect the industry's seasonality and historically have been lower in the first and fourth quarters than in the second and third quarters of the year.

Because our primary focus is hotel franchising, we benefit from the economies of scale inherent in the franchising business. The fee and cost structure of our franchising business provides opportunities to improve our operating results by increasing the number of franchised hotel rooms and the royalty rates in our franchise contracts. In addition, our operating results can also be improved through our company-wide efforts related to improving property-level performance and expanding the number of partnerships with travel-related and other companies with products and services that appeal to our franchisees and guests.

The primary factors that affect the Company's results are: the number and relative mix of hotel rooms in the various hotel lodging price categories, growth in the number of hotel rooms owned and under franchise, occupancy and room rates achieved by the hotels in our system, the average royalty rates achieved in our franchise agreements, the level of franchise sales and relicensing activity, the number of qualified vendor arrangements and partnerships and the level of engagement with these partners by our franchisees and guests, and our ability to manage costs. The number of rooms in our hotel system and the occupancy and room rates at those hotel properties significantly affect the Company's results because our fees are based upon room revenues or the number of rooms at owned and franchised hotels. The key industry standard for measuring hotel-operating performance is revenue per available room ("RevPAR"), which is calculated by multiplying the percentage of occupied rooms by the average daily room rate ("ADR") realized. Our variable overhead costs associated with the franchise system growth of our established brands have historically been less than the incremental royalty fees generated from new franchises. Accordingly, over the long-term, the continued growth of our franchise business should enable us to realize the benefits from the operating leverage in place and improve our operating results.

We are required by our franchise agreements to use the marketing and reservation fees we collect for system-wide marketing and reservation activities. These expenditures, which include advertising costs and the costs to maintain our central reservations systems, enhance awareness and consumer preference for our brands and deliver guests to our franchisees. Greater awareness and preference promote long-term growth in business delivery to our franchisees and increases the desirability of our brands to hotel owners and developers, which ultimately increases the franchise fees earned by the Company. Additionally, the Company's management agreements include cost reimbursements, which is primarily related to payroll costs at the managed hotels where the Company is the employer.

Our Company articulates its mission as a commitment to our franchisees' profitability by providing our franchisees with hotel franchises that strive to generate the highest return on investment of any hotel franchise. We have developed an operating system dedicated to our franchisees' success that focuses on delivering guests to their hotels and reducing hotel operating costs.

We believe that executing on our strategic priorities creates value for our shareholders. Our Company focuses on the following strategic priorities:

*Profitable Growth -* Our success is dependent on improving the performance of our hotels, increasing the size of our system by selling additional hotel franchises with a focus on revenue-intense chain scales and markets, improving our royalty rates, expanding our qualified vendor and partnership programs and maintaining a disciplined cost structure. We attempt to improve our revenues and overall profitability by providing a variety of products and services designed to increase business delivery

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and/or reduce operating and development costs. These products and services include national marketing campaigns, a guest loyalty program, a central reservation system, property and yield management programs and systems, revenue management services, quality assurance standards, and qualified vendor relationships and partnerships with companies that provide products and services to our franchisees and guests. We believe that healthy brands, which deliver a compelling return on investment, will enable us to sell additional hotel franchises and raise royalty rates. We have multiple brands that meet the needs of many different types of guests, and can be developed at various price points and applied to both new and existing hotels. This ensures that we have brands suitable for creating growth in a variety of market conditions. Improving the performance of the hotels in our system, strategically growing the system through additional franchise sales, and improving franchise agreement pricing while maintaining a disciplined cost structure are the keys to profitable growth.

*Maximizing Financial Returns and Creating Value for Shareholders* - Our capital allocation decisions, including our capital structure and the uses of capital, are intended to maximize our return on invested capital and create value for our shareholders. Since our business has not historically required significant reinvestment of capital, we typically utilize cash in ways that management believes provides the greatest returns to our shareholders, which include acquisitions, share repurchases, and dividends. Refer to the Liquidity and Capital Resources section in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for more information regarding our capital returns to shareholders.

In addition to our hotel franchising business, we have also developed or acquired 10 Cambria, four Everhome Suites, one Radisson RED, one Radisson Blu, and one Country Inn & Suites open and operating hotels. Owning hotels allows us to increase the presence of our newly introduced brands in the U.S., drive greater guest satisfaction and brand preference, and ultimately increase the number of franchise agreements awarded. When developing hotels, we seek key markets with strong growth potential that will deliver strong operating performance and improve the recognition of our brands. Our hotel development and ownership efforts primarily focus on the Cambria Hotels and Everhome Suites brands. We believe our owned hotels provide us the opportunity to support and accelerate the growth of these brands. We do not anticipate owning hotels on a permanent basis and we expect to target dispositions to a franchisee encumbered with a long-term Choice franchise agreement in the future.

A key component of our strategy for owned hotels is to maximize revenues and manage costs. We strive to optimize revenues by focusing on revenue management, increasing guest loyalty, expanding brand awareness with targeted customer groupings, and providing superior guest service. Other than four owned hotels, we currently do not manage our owned hotels but utilize the services of third-party hotel management companies that provide their own employees. We manage costs by setting performance goals for our hotel management companies and optimizing distribution channels.

The Company also allocates capital to financing, investment, and guaranty support to incentivize franchise development for certain brands in strategic markets. The timing and amount of these investments are subject to market and other conditions.

We believe our growth investments and strategic priorities, when properly implemented, will enhance our profitability, maximize our financial returns, and continue to generate value for our shareholders.

Our direct real estate exposure is currently limited to activity in the U.S., including our owned hotel assets open and under development. In addition, our development activities that involve financing, equity investments, and guaranty support to hotel developers create limited additional exposure to the real estate markets. For additional information, refer to the Investing Activities caption in the Liquidity and Capital Resources section in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Company was incorporated in 1980 under the laws of the State of Delaware.

***The Lodging Industry***

Companies participating in the lodging industry primarily do so through a combination of one or more of the three primary lodging industry activities: ownership, franchising, and management. A company's relative reliance on each of these activities determines which drivers most influence its profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ownership requires a substantial capital commitment and involves the most risk but offers high returns due to the owner's ability to influence its margins by driving RevPAR, managing operating expenses, and providing financial leverage. The ownership model has a high fixed-cost structure that results in a high degree of operating leverage relative to RevPAR performance. As a result, profits escalate rapidly in a lodging up-cycle but erode quickly in a lodging downturn as costs rarely decline as fast as revenue. Profits from an ownership model increase at a greater rate from RevPAR growth that is attributable to ADR growth rather than from occupancy gains since there are more incremental costs associated with higher guest volumes as compared to higher pricing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Franchisors license their brands to a hotel owner, giving the hotel owner the right to use the brand name, logo, operating practices, and reservations systems in exchange for a fee and an agreement to operate the hotel in accordance with the franchisor's brand standards. Under a typical franchise agreement, the hotel owner pays the franchisor an initial fee, a percentage-of-revenue royalty fee, and a marketing & reservation fee. A franchisor's revenues are dependent on the number of rooms in its system and the top-line revenue performance of those hotels. Earnings drivers include RevPAR increases, unit growth, and royalty rate improvement. Franchisors enjoy significant operating leverage in their business model since it typically costs little to add a new hotel franchise to an existing system. Franchisors normally benefit from higher industry supply growth because unit growth usually outpaces lower RevPAR resulting from excess supply. As a result, franchisors benefit from both RevPAR growth and supply increases, which aids in reducing the impact of lodging industry economic cycles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management companies operate hotels for the owners that do not have the expertise and/or the desire to self-manage the hotels. These companies collect management fees predominately based on revenues earned and/or profits generated. Similar to franchising activities, the key drivers of revenue-based management fees are RevPAR and unit growth. Similar to ownership activities, profit based fees are driven by improved hotel margins and RevPAR growth.

Similar to other industries, the lodging industry experiences both positive and negative operating cycles. Positive operating cycles are characterized as periods of sustained occupancy growth, increasing room rates, and an increase in hotel development. These cycles usually continue until either the economy sustains a prolonged downturn, conditions create excess supply, or some external factor occurs such as war, terrorism, pandemic, and/or natural resource shortages. Negative operating cycles are characterized by hoteliers reducing room rates to stimulate occupancy and a reduction in hotel development. An industry recovery usually begins with an increase in occupancy followed by hoteliers increasing room rates. As demand begins to exceed room supply, then occupancies and rates will improve. Collectively, these factors will result in an increase in hotel development.

Hotel room supply growth is cyclical as hotel construction responds to interest rates, construction and material supply conditions, capital availability, and industry fundamentals. Historically, the lodging industry has added hotel rooms to its inventory through new construction due largely to favorable lending environments that encouraged hotel development. Typically, hotel development continues during favorable lending environments until the increase in room supply outpaces demand. The excess supply eventually results in lower occupancies, which results in hoteliers reducing room rates to stimulate demand, and reduced hotel development. Over time, the slow growth in hotel supply results in increased occupancy rates and allows hotels to again increase room rates. The increase in occupancy and room rates serves as a catalyst for increased hotel development.

As a franchisor with 7,575 opened hotels, including ownership of 17 hotels and management of 13 hotels (inclusive of four owned hotels), we believe we are generally well positioned in any stage of the lodging cycle as our fee-for-service business model has historically delivered predictable and profitable, long-term growth in a variety of lodging and economic environments. We have historically benefited from both the RevPAR gains typically experienced in the early stages of recovery as our revenues are based on our franchisees' gross room revenues, and the supply growth normally occurring in the later stages as we increase our portfolio size.

The Company's portfolio of brands offers both new construction and conversion opportunities. Our new construction brands typically benefit from periods of supply growth and favorable capital availability and pricing. Our conversion brands also benefit from periods of supply growth as the construction of hotels increases the need for existing hotels to seek new brand affiliations. Furthermore, the Company's conversion brands generally benefit from lodging cycle downturns as our unit growth has been historically driven from the conversion of independent and other hotel chain affiliates into our system as these hotels endeavor to improve their performance, which typically outpaces termination of hotels from our system.

The lodging industry can be divided into chain scale categories of generally competitive brands as follows:

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| | |
|:---|:---|
| **Chain Scale** | **Brand Examples** |
| Luxury | Four Seasons, Ritz Carlton, W Hotel, JW Marriott |
| Upper Upscale | Radisson Blu, Marriott, Hilton, Hyatt, Sheraton |
| Upscale | Cambria Hotels, Radisson, Courtyard, Hyatt Place, Hilton Garden Inn |
| Upper Midscale | Comfort Inn, Country Inn & Suites, Holiday Inn Express, Hampton by Hilton, Fairfield Inn |
| Midscale | Quality Inn, Sleep Inn, Best Western, Baymont |
| Economy | Econo Lodge, Super 8, Red Roof Inn, Motel 6 |

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The lodging industry consists of independent operators and those that have joined national hotel franchise chains. Independent operators of hotels not owned or managed by major lodging companies have increasingly joined national hotel franchise chains

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as a means of remaining competitive with hotels owned by or affiliated with national lodging companies. Hotel owners also generally have the flexibility to reposition hotels between the various chain scale categories to maximize profitability or for other reasons. For example, owners may choose to reposition a hotel to a higher chain scale through capital investment or a lower chain scale to limit capital outlays depending on the individual requirements of the owner.

Due to the fact that a significant portion of the costs of owning and operating a hotel are generally fixed, increases in revenues generated by affiliation with a hotel franchise chain can improve a hotel's financial performance. The large hotel franchise chains, including us, generally provide a number of support services to hotel operators designed to improve the financial performance of their properties including central reservation and property management systems, marketing and advertising programs, training and education programs, revenue enhancement services, and relationships with qualified vendors to streamline their purchasing processes and make lower cost products available. We believe that national franchise chains with a large number of hotels enjoy greater brand awareness among potential guests and greater bargaining power with suppliers than those with fewer hotels, and that greater brand awareness and bargaining power can increase the desirability of a hotel to its potential guests and reduce operating costs of a hotel. Furthermore, we believe that hotel operators choose lodging franchisors based primarily on the perceived value and quality of each franchisor's brand and its services, and the extent to which affiliation with that franchisor may increase the hotel operator's profitability. We believe these factors enhance the resiliency of hotels affiliated with brands, and as a result, the value proposition of the hotel franchise chains during a negative operating cycle.

***Choice's Franchising Business***

We operate primarily as a hotel franchisor and deploy our family of 22 brands and brand extensions, which represent both new construction and conversion brands and compete at various hotel consumer and developer price points.

*Economics of the Franchising Business -* The fee and cost structure of our business provides opportunities for us to improve operating results by increasing the number of franchised hotel rooms, improving RevPAR performance, and increasing the royalty rates in our franchise contracts. As a hotel franchisor, we derive our revenue primarily from various franchise fees, which consist primarily of an initial fee and ongoing royalty, marketing, and reservation fees that are typically based on a percentage of the franchised hotel's gross room revenues. The initial fee and the ongoing royalty portion of the franchise fees are intended to cover our operating expenses, which are the expenses incurred in business development, quality assurance, administrative support, certain franchise services, and to provide us with operating profits. The marketing and reservation fees are used for the expenses associated with marketing, media, advertising, providing a central reservation system, and certain franchise services.

Our fees depend on the number of rooms in our system, the gross room revenues generated by our franchisees, and the royalty rates in our franchise contracts. We enjoy significant operating leverage since the variable operating costs associated with the franchise system growth of our established brands have historically been less than the incremental fees generated from new franchises. We believe that our business is well positioned in the lodging industry since we generally benefit from both increases in RevPAR and unit growth from new hotel construction or conversion of existing hotel assets into our system. In addition, improving business delivery to our franchisees should allow us to improve the royalty rates in our franchise contracts.

Our family of well-known and diversified brands positions us well within the lodging industry. Our new hotel development brands, such as Cambria Hotels, Comfort, Sleep Inn, WoodSpring Suites, Everhome Suites, and Country Inn & Suites, offer hotel developers an array of choices at various price points for transient and extended stay business during periods of supply growth in the various hotel chain scale categories. Certain of our brands, such as Quality, Clarion Pointe, Ascend Collection, Econo Lodge, and Radisson, offer conversion opportunities during both industry contraction and growth cycles to independent operators and non-Choice affiliated hotels who desire to affiliate with our brands and take advantage of the services we have to offer.

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*Building Strong Brands -* Each of our brands has particular attributes and strengths, including awareness with both consumers and developers. Our strategy is to utilize the strengths of each brand for room growth, RevPAR gains, and royalty rate improvement, all of which will create revenue growth. We believe brand consistency, brand quality, and guest satisfaction are critical in improving brand performance and building strong brands.

We have multiple brands that are positioned to meet the needs of many types of guests. These brands can be developed at various price points and are suitable for both new construction properties and conversion of existing hotels. This flexibility ensures that we have brands suitable for creating room growth in various types of markets, with various types of customers, and during both industry contraction and growth cycles. During times of lower industry supply growth and tighter capital markets, we can target conversions of existing non-Choice affiliated hotels seeking the awareness and proven performance provided by our brands. During periods of strong industry supply growth, we generally expect a greater portion of our room growth to come from our new construction brands. We believe that a large number of markets can still support our hotel brands and that the growth potential for our brands remains strong.

We strive to maintain the strength of our brands by enhancing product consistency and quality. We attempt to achieve consistency and quality for new entrants into the franchise system by placing prospective hotels in the appropriate brand based on the physical characteristics, the expected financial and operating performance, amenities of the hotel, and by requiring property improvement plans, when necessary, to ensure the new hotel meets the quality standards of the brand. Furthermore, we may require hotels currently in our franchise system to execute property improvement plans at specified contractual windows to ensure that they continue to maintain the product consistency and quality standards of the brand.

We believe that each of our brands appeal to the targeted hotel owners and guests because of unique brand standards, marketing campaigns, loyalty programs, reservation delivery, revenue enhancing programs, service levels, and pricing.

*Delivering Exceptional Services -* We provide a combination of services and technology-based offerings to help our franchisees improve performance. We have field services staff members located nationwide that help franchisees improve RevPAR performance, efficiency of their hotel operations, and guest satisfaction. In addition, we provide our franchisees with education and training programs as well as revenue management technology and services designed to improve property-level performance. These services and products promote revenue gains for franchisees and improve guest satisfaction which translate into both higher royalties for the Company and improved returns for owners, leading to further room growth by making our brands even more attractive to prospective franchisees. We develop our services based on customer needs and focus on activities that generate a high return on investment for our franchisees.

*Reaching More Consumers -* We believe hotel owners value and benefit from the large volume of guests that we deliver through a mix of activities, including brand marketing, reservation systems, account sales (corporate, government, social, military, educational, and fraternal organizations), and the Company's loyalty program, Choice Privileges<sup>®</sup>. Our strategy is to maximize the effectiveness of these activities in delivering both leisure and business travelers to Choice-branded hotels.

The Company intends to continue to increase awareness of its brands through its national marketing campaigns and continual enhancements to its loyalty program, including promotions. These campaigns are intended to generate a compelling message to consumers to create even greater awareness for our brands with the ultimate goal of driving business through our central reservation system. Local and regional co-op marketing campaigns will continue to be utilized to leverage the national marketing programs to drive business to our franchised properties at a local level. We expect our efforts at marketing directly to individual guests and corporate customers will continue to be enhanced through the use of our customer relationship management technology and programs, as well as our field-based sales agents that are focused on increasing our share of business travelers. Our continued focus on overall brand quality coupled with our marketing initiatives is designed to stimulate room demand for our franchised hotels through improved guest awareness and satisfaction.

Our central reservations system is a critical technology used to deliver guests to our franchisees through multiple channels, including our call centers, proprietary web and mobile sites, global distribution systems (e.g., SABRE, Amadeus), online travel agents ("OTAs") (e.g., Expedia, Booking.com), and internet referral or booking services (e.g., Kayak, Tripadvisor). We believe our well-known brands, combined with our relationships with many internet distribution websites, benefits our franchisees by facilitating increased rate and reservations delivery, and reducing costs and operational complexity.

*Leveraging Size, Scale, and Distribution -* We continually focus on identifying methods to utilize our significant platform of hotels in our system and our relationships with hospitality-related vendors and partnerships with travel-related providers in order to reduce costs and increase returns for our franchisees. We are focused on expanding our business through key partnerships, new technology, and other key franchisee resources, which is reflected in our partnership services and fees revenues. The expansion of these relationships has enabled us to further drive our top-line revenue and deliver tangible value-added solutions to our hotel owners and customers. For example, we create relationships with qualified vendors to: (i) make low-cost products available to our franchisees, (ii) streamline the purchasing process, and (iii) maintain brand standards and

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consistency. We also create relationships with key partners to market their services directly to our guests. These relationships provide value-added travel-related services to our guests and generate revenues for the Company. We continue to expand these relationships and identify new methods for decreasing hotel operating costs by increasing penetration within our existing franchise system and enhancing our existing vendor relationships and/or creating new vendor relationships. We believe our efforts to leverage the Company's size, scale, and distribution benefit the Company by enhancing brand quality and consistency, improving our franchisees returns and satisfaction, and generating partnership services and fees revenues.

***Industry Positioning***

Our brands offer consumers and developers a wide range of options for transient and extended stay customers, including economy, midscale, upper midscale, upscale, and upper upscale hotels. Our brands consist of the following:

*Clarion -* Clarion helps owners of existing assets with food and beverage capabilities achieve strong returns with reasonable investment. Clarion allows a more focused and efficient food and beverage operational model that works well with a variety of conversion property configurations. Clarion helps business and leisure guests "Get Together Here™" by providing meeting/banquet facilities, restaurants, and lounges. Amenities include free high-speed internet access, a pool or fitness center, and a business center. The principal competitor brands include Holiday Inn and Ramada.

*Clarion Pointe -* Clarion Pointe is ideal for owners who want to strategically reposition their limited-service property into a brand with strong awareness and a concept that satisfies the expectations of emerging travelers. The hotels offer guests a convenient and affordable experience with elevated essentials in just the right places, including contemporary design touches, curated food and beverage options, and on-demand connectivity. The principal competitor brands include Best Western and Wingate.

*Comfort -* The Comfort brand family is the flagship brand in the Choice Hotels portfolio and is inclusive of Comfort Inn, Comfort Suites, and Comfort Inn & Suites. Comfort is an upper midscale brand that allows guests to unlock the joy of traveling while enabling owners to capitalize on a trusted brand with proven performance and market leadership. The properties offer guest rooms and public spaces that can transform from day to night or business to leisure – blending form and function to optimize the guest experience and the owner's investment. The principal competitor brands include Hampton by Hilton, Holiday Inn Express, and Fairfield by Marriott.

*Country Inn & Suites by Radisson -* Country Inn & Suites delivers "generous hospitality with touches of home", creating heartfelt experiences for travelers through inviting design, thoughtful touches, and genuine service. Guests enjoy a mix of spacious standard rooms and suites, cozy seating by the living room fireplace, and complementary offerings including a hot breakfast, all-day coffee and tea, freshly baked cookies upon arrival, free Wi-Fi, and printer access. Country Inn & Suites properties are equipped with fitness and laundry facilities, outdoor patios with fire pit features, casual workspaces, swimming pools, and meeting spaces. Guests feel cared for and valued at Country Inn & Suites, enabling them to maintain their routines while away from home. The principal competitor brands include Holiday Inn Express, Fairfield by Marriott, Best Western Plus, and Hampton by Hilton.

*Sleep Inn -* A new-construction brand, every Sleep Inn hotel is built with a specific vision in mind, which is to be a sanctuary for travelers as well as a cost-efficient property to build, operate, and maintain. Every Sleep Inn hotel offers thoughtful touches designed to help enhance our guests well-being and "Dream Better Here<sup>®</sup>." Guests find a perfectly dreamy hotel environment, with nature-inspired design elements, that create a relaxed and serene stay, providing both business and leisure travelers with free Wi-Fi, free hot breakfast, lifestyle amenities to support a "Better Night's Rest<sup>®"</sup>, and an exercise room and/or pool. The principal competitor brands include Baymont and Best Western.

*Quality Inn -* Quality helps both guests and owners "Get Your Money's Worth™" in the midscale chain scale category. Quality hotels provide clean, comfortable, and affordable accommodations, as well as the "Value Qs" of a Q Bed, Q Breakfast, Q Shower, Q Service, and Q Essentials. The brand delivers warm, friendly service, a hot breakfast, and premium bedding. The principal competitor brands include Days Inn, Baymont, La Quinta, Best Western, and Ramada.

*Park Inn by Radisson -* Park Inn by Radisson is Choice Hotels' premium value conversion brand focused on delivering the basics to "brighten up the stay". The properties feature a smoke-free environment, fast and free Wi-Fi, ample charging outlets, and hot coffee with a convenient grab-and-go breakfast, all of which are complemented by a bright welcome and friendly service. The principal competitor brands include Days Inn, Baymont, and SureStay.

*Everhome Suites -* Everhome Suites operates in the midscale extended stay chain scale category, offering developers a value-engineered new construction prototype for entry into major markets. Everhome Suites provides a "Closer to Home" experience, empowering longer staying guests to stay productive and feel connected while away from home. All suites include a fully equipped kitchen with defined spaces to work, relax, and eat. Larger one-bedroom suites come equipped with in-unit washers and dryers, larger kitchens, and a dedicated bedroom. Guests have access to free high-speed internet, a modern fitness room with Peloton stationary bikes, outdoor amenity space with grills and fire pits, 24/7 laundry facilities, and weekly housekeeping service. Each hotel also has a "Homebase Market" with food, drink, and personal items available for purchase. Small kitchen

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appliances are available to check out at the front desk through the "Homebase Essentials" program. The principal competitor brands include Candlewood Suites, Stay APT, Extended Stay America Premier Suites, StudioRes, and LivSmart.

*WoodSpring Suites -* WoodSpring Suites are all new construction, value-engineered hotels that operate in the economy extended stay chain scale category. WoodSpring developers adhere to strict prototype and design specifications and an operating model that embodies WoodSpring's promise of "It's Simple. Done Better." Every suite includes a well-designed kitchen, seating area, and a free premium movie channel. Guests have access to free high-speed internet, 24/7 laundry facilities, and bi-weekly housekeeping. The principal competitor brands include Extended Stay America, MyPlace, Studio 6, Echo Suites, and LivAway.

*MainStay Suites -* MainStay Suites operates in the midscale extended stay chain scale category, offering developers flexible conversion and new construction opportunities in a variety of market types. The MainStay Suites guest experience delivers on a "Live Like Home" promise for guests traveling for business or pleasure whose stays are longer than a few nights. All guest rooms feature fully equipped kitchens as well as separate lounges and work areas. MainStay Suites offer free high-speed internet, an exercise room, 24/7 laundry facilities, and weekly housekeeping. Each hotel also has a "MainStay Marketplace" where guests may purchase a variety of food and sundry items. Guests also have complimentary access to small kitchen appliances through the "Things I Use at Home" program. The principal competitor brands include Candlewood Suites, Extended Stay America Premier Suites, My Place Hotels, StudioRes, and LivAway.

*Suburban Studios -* Suburban Studios operate in the economy extended stay chain scale category, offering developers access to this category through flexible conversion options. Suburban Studios' "longer stays made easy" philosophy provides value-conscious, long staying guests with clean, comfortable rooms, friendly service, and the amenities they need. All guestrooms provide in-room kitchens. Guests have access to free high-speed internet, 24/7 laundry facilities, and bi-weekly housekeeping. The principal competitor brands include Extended Stay America, InTown Suites, HomeTowne Studios, SureStay Studios, Studio 6, and Echo Suites.

*Radisson Blu -* Radisson Blu hotels offer full-service, upper upscale accommodations that are redefining the hospitality experience. Scandinavian-inspired minimalist design prioritizes comfort and distinctiveness in the guestrooms, in addition to unique dining concepts, multipurpose workspaces with complimentary Wi-Fi, smart TVs, and wellness facilities. Radisson Blu hotels are located in urban and resort locations in key RevPAR markets. The principal competitor brands include Le Meridien and Kimpton.

*Park Plaza -* Park Plaza combines engaging service, contemporary elegance, and local flavor. At each hotel, team members

warmly welcome guests and make it a point to foster genuine and meaningful interactions. Refined spaces incorporate the

essence of each location and provide a vibrant social setting for guests and the local community alike. Located in capital cities

and key business and leisure destinations, these charmingly distinctive hotels help travelers connect with the authentic character

and culture of their location. The principal competitor brands include Staybridge Suites, DoubleTree, and Residence Inn.

*Cambria Hotels -* Cambria Hotels is a select service hotel brand that operates in the upscale chain scale category, targeting the top primary market locations and secondary markets with a mix of business and leisure demand. Cambria offers guests a distinct experience with simple, guilt-free indulgences and little luxuries allowing them to stay at their best while on the road. The environment matches our guests' casual lifestyles and tailors to the needs of the modern traveler. The properties feature a compelling design inspired by the location, spacious and comfortable rooms, spa inspired bathrooms, outdoor spaces featuring pools and rooftop bars (in select locations), flexible meeting space, enhanced beverage options, and small plates with flavors inspired by the destination. The principal competitor brands include Courtyard by Marriott, Aloft, Hyatt Place, Hotel Indigo, AC Hotels, and Hilton Garden Inn.

*Ascend Collection -* Ascend Collection is a global collection brand offering resort, boutique, and historic properties that are deeply connected to the character of their destinations. Ascend Collection empowers upscale hotels to retain their individual brand equity and identity while enjoying access to Choice Hotels' global distribution, technology, performance support services, training, and loyalty benefits. For independent hotels, Ascend Collection offers a platform for customer acquisition, delivery and distribution, volume purchasing benefits, and operational efficiencies. The properties can be found in suburban, small town, and resort locations. The principal competitor brands include BW Signature Collection, BW Premier Collection, Trademark, Voco, Series by Marriott, and Outset Collection by Hilton.

*Radisson RED -* An upscale, select service hotel brand, Radisson RED is characterized by a love of bold design, social connectedness, and playful twists on the conventional. These urban hotels inject new life into hospitality through informal services where anything goes. The properties have vibrant designs, encourage social sharing, and easily switch from work to play and back. Connected, trend-savvy travelers will love this unique opportunity to tailor their stay to their style. The principal competitor brands include Moxy, Citizen M, and Aloft Hotels.

*Radisson Individuals -* Radisson Individuals is an upscale collection brand that brings together independent and boutique hotels, inspiring curious travelers to uncover the untold stories of each destination. Blending a spirit of exploration with service

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excellence, these hotels offer curated amenities like distinctive dining and wellness facilities. Found in urban, suburban, and resort locations, the principal competitor brands include Autograph Collection, Curio, JdV, Tapestry, and Tribute.

*Radisson -* Radisson is a full-service hotel brand offering an upscale experience designed for today's modern travelers. Striking the perfect balance between dependability and discovery, Radisson meets the evolving needs of guests with functional guestrooms, upscale on-site services such as modern fitness facilities, restaurants and bars, and free Wi-Fi. It provides a steady, dependable base from which guests can work, connect, discover, and rest. Radisson hotels are found in key urban, suburban, resort, and airport locations. The principal competitor brands include DoubleTree by Hilton, Delta Hotels, and Crowne Plaza.

*Econo Lodge -* Econo Lodge offers an "easy stop on the road" for value-oriented travelers. Free high-speed internet, bedside recharge outlets, in-room refrigerators, and complimentary morning coffee position Econo Lodge as a smart choice for guests who appreciate convenience and affordability. The principal competitor brands include SureStay by Best Western, Knights Inn, Days Inn, and Red Roof Inn.

*Rodeway Inn -* Rodeway Inn offers sensible lodging for budget-conscious travelers who want to hit the road with confidence. With free coffee to start the day and free high-speed internet to stay connected, Rodeway Inn delivers a reliable option for practical travelers looking for a "Good night. Great Savings." The principal competitor brands include Americas Best Value Inn and Motel 6.

The Company's brands also include the Radisson Collection and Radisson Inn & Suites, however there are no open properties under these brands as of December 31, 2025.

***U.S. Franchise System***

Our standard U.S. franchise agreements grant franchisees the non-exclusive right to use certain of our trademarks and to receive the benefits from our franchise system in order to facilitate the operation of their franchised hotels in specified locations. Our U.S. franchise agreements generally have terms ranging from 10 to 30 years, with certain rights for each of the franchisor and franchisee to terminate the agreement. Our U.S. franchisees operate under one of 22 brands and brand extensions.

The following table presents the key statistics related to our U.S. franchise system for the five years ended December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **2021** | **2022** | **2023** | **2024** | **2025** |
| Number of properties, end of period | 5913 | 6296 | 6305 | 6328 | 6187 |
| Number of rooms, end of period | 458030 | 494409 | 496965 | 511739 | 496979 |
| Royalty fees (in thousands)<sup>(1)</sup> | $391336 | $443313 | $458077 | $454723 | $439840 |
| Average royalty rate<sup>(2)</sup> | 5.01% | 4.93% | 4.99% | 5.06% | 5.14% |
| Average occupancy percentage<sup>(2), (3)</sup> | 57.2% | 58.0% | 56.9% | 56.4% | 55.6% |
| Average daily room rate (ADR)<sup>(2), (3)</sup> | $84.06 | $95.13 | $96.92 | $96.67 | $95.05 |
| Revenue per available room (RevPAR)<sup>(2), (3)</sup> | $48.10 | $55.16 | $55.19 | $54.54 | $52.85 |

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(1)For the year ended December 31, 2022, the legacy Radisson brands are included for the period from the August 11, 2022 acquisition date through December 31, 2022. Additionally, royalty fees include intersegment royalties assessed to the Company's owned hotels of $2.8 million for 2025, $2.4 million for 2024, $2.0 million for 2023, $2.2 million for 2022, and $1.6 million for 2021.

(2)To enhance the comparability for the year ended December 31, 2022, the average royalty rate, average occupancy percentage, ADR, and RevPAR reflect the operating performance as if the legacy Radisson brands were acquired on January 1, 2022.

(3)The Company calculates the RevPAR metrics based on information as reported by the franchisees. To accurately reflect average occupancy percentage, ADR, and RevPAR, the company revises its prior years' operating statistics for the most current information provided.

***Owned and Managed Hotels***

While the hotel franchising business represents the Company's primary operations, the Company also owns 10 Cambria hotels, four Everhome Suites, one Radisson RED, one Radisson Blu, and one Country Inn & Suites, and manages 13 hotels (inclusive of four owned hotels). We generate revenue from the owned hotels primarily from guest stays. We generate revenue from the managed hotels from base and incentive management fees and cost reimbursements, which is primarily for payroll costs at the managed hotels where the Company is the employer.

***International Franchise Operations***

The Company conducts its international franchise operations primarily through a combination of direct franchising and master franchising relationships. Our business strategy has been to conduct direct franchising in those international markets where both franchising is an accepted business model and our brands can achieve significant revenue growth through our proprietary distribution channels. We typically enter into master franchise agreements in those international markets with complex business models and language and cultural differences. Master franchising relationships are governed by agreements that generally provide the master franchisee with the right to use and sub-license the use of our brands in a specific geographic region. We

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also enter into certain distribution arrangements which grant hotels access to certain of our proprietary distribution channels in order to broaden our offerings in a given market.

When entering into master franchising relationships, we strive to select partners that have both professional hotel and asset management capabilities along with the financial capacity to invest in building the Company's brands in their respective markets. Master franchising relationships typically provide lower revenues to the Company as the master franchisees are responsible for managing certain necessary services (such as training, quality assurance, reservations and marketing) to support the franchised hotels in the assigned development territory and, therefore, retain a larger percentage of the hotel franchise fees to cover their expenses. The master franchisee collects the fees paid by the local franchisee and remits an agreed upon share to us. Our master franchise and similar multi-unit licensing agreements have expiration dates, which we actively manage and potentially renew as we deem beneficial. We also enter into distribution agreements which grant hotels access to certain of our proprietary distribution channels in order to broaden our offerings in a given market.

In some territories outside the U.S., hotel franchising has less prevalence in favor of independent operators. We believe chain and franchise affiliation will increase in certain international markets as local economies grow and hotel owners seek the economies of scale in centralized reservations systems and marketing programs. We believe that international franchise operations will provide a long-term growth opportunity for the Company and as a result, we will continue to make investments into our international franchise operations, which are expected to enhance the value proposition for prospective international franchisees.

The following chart summarizes our franchise system and operating results outside of the U.S.<sup>(1)</sup>:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **2021** | **2022** | **2023** | **2024** | **2025** |
| Number of properties, end of period | 1117 | 1191 | 1222 | 1258 | 1388 |
| Number of rooms, end of period | 121716 | 133395 | 136021 | 142071 | 159846 |
| Royalty fees (in thousands) | $14958 | $20041 | $28859 | $29822 | $41323 |

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(1)Reporting of operating statistics (i.e., average occupancy percentage, average daily room rate) of international franchisees is not required by all master franchise contracts.

As of December 31, 2025, the open hotels and rooms by region and franchising relationship are presented below:

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|:---|:---|:---|:---|:---|:---|:---|
| | **Direct Franchising** | **Direct Franchising** | **Master Franchising** | **Master Franchising** | **Total** | **Total** |
| | **Hotels** | **Rooms** | **Hotels** | **Rooms** | **Hotels** | **Rooms** |
| Asia-Pacific | 151 | 7232 | 227 | 27109 | 378 | 34341 |
| Europe & Middle East | 150 | 15443 | 323 | 54455 | 473 | 69898 |
| Americas (excluding U.S.) | 459 | 43817 | 78 | 11790 | 537 | 55607 |
| Total International | 760 | 66492 | 628 | 93354 | 1388 | 159846 |

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The Company's international operations are primarily conducted in the following countries and territories, as organized by region:

*Asia-Pacific -* Australia, China, India, Japan, and New Zealand.

*Europe & Middle East -* Andorra, Austria*,* Czech Republic, Denmark, Faroe Islands, Finland, France, Germany, Ireland, Italy, Kingdom of Saudi Arabia, Lithuania, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Turkey, and the United Kingdom.

*Americas (excluding U.S.) -* Argentina, Aruba, Bahamas, Barbados, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Honduras, Mexico, Panama, Peru, Puerto Rico, Sint Maarten, Suriname, Trinidad and Tobago, Uruguay, and U.S. Virgin Islands.

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As of December 31, 2025, the worldwide open hotels and rooms by region are presented below:

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **U.S.** | **U.S.** | **Asia-Pacific** | **Asia-Pacific** | **Europe &<br>Middle East** | **Europe &<br>Middle East** | **Americas <br>(excluding U.S.)** | **Americas <br>(excluding U.S.)** | **Total** | **Total** |
| | **Hotels** | **Rooms** | **Hotels** | **Rooms** | **Hotels** | **Rooms** | **Hotels** | **Rooms** | **Hotels** | **Rooms** |
| Comfort <sup>(1)</sup> | 1652 | 128836 | 193 | 18347 | 101 | 14157 | 195 | 17898 | 2141 | 179238 |
| Quality Inn | 1571 | 113613 | 60 | 3622 | 129 | 19343 | 120 | 11833 | 1880 | 148411 |
| Econo Lodge | 599 | 34658 | 18 | 662 |  |  | 34 | 1703 | 651 | 37023 |
| Rodeway | 432 | 23838 |  |  |  |  | 10 | 648 | 442 | 24486 |
| Sleep Inn | 404 | 28199 |  |  |  |  | 22 | 2449 | 426 | 30648 |
| Country | 402 | 32333 |  |  |  |  | 7 | 595 | 409 | 32928 |
| Ascend Collection | 236 | 38426 | 83 | 9500 | 132 | 15087 | 48 | 5964 | 499 | 68977 |
| Clarion <sup>(2)</sup> | 181 | 18562 | 17 | 1630 | 54 | 14845 | 14 | 1479 | 266 | 36516 |
| WoodSpring Suites | 284 | 34176 |  |  |  |  |  |  | 284 | 34176 |
| Radisson <sup>(3)</sup> | 52 | 10090 |  |  |  |  | 75 | 11984 | 127 | 22074 |
| MainStay Suites | 143 | 10337 | 7 | 580 |  |  | 1 | 100 | 151 | 11017 |
| Suburban Studios | 115 | 9558 |  |  |  |  |  |  | 115 | 9558 |
| Cambria Hotels | 76 | 10189 |  |  |  |  |  |  | 76 | 10189 |
| Park Inn | 15 | 1294 |  |  |  |  | 11 | 954 | 26 | 2248 |
| Everhome Suites | 25 | 2870 |  |  |  |  |  |  | 25 | 2870 |
| Other <sup>(4)</sup> |  |  |  |  | 57 | 6466 |  |  | 57 | 6466 |
| **Total** | 6187 | 496979 | 378 | 34341 | 473 | 69898 | 537 | 55607 | 7575 | 656825 |

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(1)Includes the Comfort family of brand extensions, including Comfort Inn and Comfort Suites.

(2)Includes the Clarion family of brand extensions, including Clarion and Clarion Pointe.

(3)Includes the Radisson, Radisson Blu, Radisson Individuals, Radisson RED, and Park Plaza brands.

(4)Includes other brands under Master Franchise Agreements.

***Franchise Sales***

Expansion of the number of hotels in our franchise system is important to our business model. We have identified key market areas for hotel development based on supply and demand relationships and our strategic objectives. Development opportunities are typically offered to: (i) existing franchisees, (ii) developers of hotels or multi-family housing, (iii) owners of independent hotels and motels, (iv) owners of hotels leaving other franchisors' brands, and (v) franchisees of non-hotel related products such as restaurants.

Our franchise sales organization is structured to support the continued growth of the Company through awarding franchise agreements with a focus on revenue-intense chain scales and markets. The franchise sales organization employs both sales managers as well as regional vice presidents. This organization emphasizes the benefits of affiliating with the Choice system, our commitment to helping hotels improve profitability, our central reservation delivery services, our marketing and customer loyalty programs, our revenue management services, our training and support systems (including our proprietary property management systems), and our Company's track record of delivering growth and profitability. Regional vice presidents are assigned to specific brands to leverage their brand expertise to enhance product consistency and deal flow. Our sales managers ensure each prospective hotel is placed in the appropriate brand, facilitate teamwork and information sharing amongst the sales directors, and provide better service to our potential franchisees. The structure of this organization integrates our brands and strategies, and allows our brand teams to focus on understanding, anticipating, and meeting the unique needs of our customers.

Our objective is to continue to strategically grow our portfolio by selling the Company's brands spanning the various chain scale categories. Based on market conditions and other circumstances, we may offer certain incentives to developers to increase development of our brands, such as discounting various fees including the initial franchise fee, royalty fee, marketing and reservation fee, and providing franchise agreement acquisition cost payments to support development, property improvements, and other hotel expenditures.

Because retention of our existing franchisees is important to our growth strategy, we have a formal impact policy. This policy offers existing franchisees protection from the opening of a same-brand property within a specified distance, depending upon the market in which the property is located. The policy applies to most, but not all, of the Company's brands.

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***Investment, Financing, and Guaranty Support***

Our Board of Directors authorized a program which permits us to offer investment, financing, and guaranty support to qualified franchisees, and allows us to acquire or develop and resell hotels to incentivize franchise development of our brands in strategic markets. We deploy capital pursuant to this program opportunistically to promote the growth of our brands. The amount and timing of the investment in this program will be dependent on market and other conditions and we generally expect to recycle these investments within a five year period. For additional information, refer to the Cash Flows from Investing Activities caption in the Liquidity and Capital Resources section in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

***Franchise Agreements***

Our standard U.S. franchise agreements grant franchisees the non-exclusive right to use certain of our trademarks and to receive the benefits from our franchise system in order to facilitate the operation of their franchised hotels in specified locations. Our U.S. franchise agreements generally have terms ranging from 10 to 30 years. Generally, either party to our standard U.S. franchise agreement can terminate the agreement prior to the conclusion of the agreement's term under certain circumstances, such as upon designated anniversaries of the agreement, subject to applicable law. Early termination options give us the flexibility to eliminate or re-brand our properties for reasons other than contractual failure by the franchisee. This allows us the opportunity to strengthen our brand portfolio in various markets by replacing weaker performing hotels. We also have the right to terminate a franchise agreement if a franchisee fails to bring the property into compliance with contractual or quality standards within specific time periods. The franchise agreements typically contain liquidated damages provisions addressing franchisee termination at intervals other than those specified in the agreement which represent a fair and reasonable measure of damages that both parties agree should be paid to us.

The Company utilizes master development agreements ("MDA") with respect to the WoodSpring Suites and Everhome Suites brands (and on occasion other brands). In exchange for a non-refundable fee, developers are provided geographic exclusivity to enter into a specified number of franchise agreements and develop properties of the specified brand. The upfront fees received on signing of the MDA are non-refundable and are allocable to the affiliation fees due upon the execution of each franchise agreement between the parties in the regions covered by the MDA. The MDA specifies development schedules the developer must maintain. If the development schedules are not met, the Company can terminate the geographic exclusivity, however the upfront fees remain allocable to future franchise agreement affiliation fees as long as the MDA remains in effect.

The Company's franchise agreements are generally individually negotiated and we believe the terms are competitive with lodging industry standards for the respective chain scales. Franchise fees usually have three primary components: an affiliation fee, a royalty fee, and a marketing and reservation fee. Royalty fees typically range from 5% to 6% of gross room revenues, and marketing and reservation fees typically range from 3% to 4% of gross room revenues. During the negotiation process with a prospective franchisee, the Company may discount the standard royalty fee and/or the marketing and reservation fee during the initial years of the franchise agreement as a franchise acquisition strategy. Typically, these discounts will expire over time when the contractual fees reach the standard franchise fees in effect at the time the franchise agreement was executed.

***Franchise Operations***

Our operations are designed to help our franchisees improve RevPAR and lower their operating and development costs, as these are the measures of performance that most directly impact franchisee profitability. Our focus is not only to help increase the number of reservations delivered to our franchisees, but also to help increase the percentage of guest reservations processed through our proprietary channels. We believe that our proprietary channels, which include our loyalty program, propriety internet sites (including mobile and tablet applications), global sales programs, and interfaces with global distribution systems, help in delivering guests to our franchisees' hotels at the lowest cost to the franchisee. We believe that by helping our franchisees become more profitable, then we will enhance our ability to retain our existing franchisees, attract new franchisees, and improve the pricing of our franchise agreements. The key aspects of our franchise operations are the following:

*Brand Name Marketing and Advertising -* The majority of our franchised hotels are typically located in areas conveniently accessible to business and leisure travelers, and therefore, a significant portion of hotel room nights are sold to guests who either walk-in or contact the hotel directly. As a result, we believe that brand name recognition and the strength of the brand reputation are important factors in influencing business and leisure traveler hotel accommodation choices.

Our marketing and advertising programs are designed to heighten consumer awareness and preference for our brands as offering the greatest value and convenience in the lodging categories in which we compete. Marketing and advertising efforts include national television, social media and digital advertising, online radio advertising, print advertising in trade media, and promotional events, which include joint marketing promotions with qualified vendors and corporate partners. We also actively seek to reach travelers who are shopping for travel online by purchasing key search related terms and meta search ads from the various search engine providers to help ensure that our franchisees' hotels are prominently displayed to potential guests.

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We conduct numerous marketing and sales programs and deploy field-based sales agents which target corporate entities, travel agencies, groups, and small and medium size enterprises including business travelers, senior citizens, automobile club members, government and military employees, educational organizations, and meeting planners. Other marketing efforts include U.S. and international trade show programs, targeted marketing campaigns (including print, digital, and social media), direct-mail programs, marketing e-mail programs, and centralized commissions for travel agents.

We operate a loyalty program, Choice Privileges, for all of our brands except WoodSpring Suites, in order to attract and retain travelers by rewarding stays with points towards free hotel nights at properties and through our partners that provide travel-related accommodations. The loyalty program also offers guests the ability to redeem points for gift cards at participating retailers, and earn airline miles from qualifying stays redeemable for flights with various airline partners. These programs allow us to conduct lower cost, more targeted marketing campaigns to our consumers, help us to deliver business to our franchised hotels, and are an important selling point for our franchise sales personnel. As of December 31, 2025, the Choice Privileges program had more than 74 million worldwide members. Growing the membership of the Choice Privileges loyalty program, as well as increasing the number of room nights consumed by existing members, will continue to be a focus of the Company.

Marketing and advertising programs are directed by our marketing department, which utilizes the services of independent advertising agencies. We also employ home-based sales personnel geographically located across the U.S. using personal sales calls, telemarketing, and other techniques to target specific customer groups, such as potential corporate clients in areas where our franchised hotels are located, the group travel market, and meeting planners.

Our field-based franchise services area directors work with our franchisees to profitably grow revenue, improve the efficiency of their hotel operations, and maintain and improve guest satisfaction. The franchise services area directors advise the franchisees on topics such as marketing their hotels, improving quality, and maximizing the benefits offered by the Choice reservations system. Our proprietary property management system, choiceADVANTAGE, includes a rate and selling management tool to help our franchisees better manage rates and inventory, which are designed to help them improve RevPAR by optimizing ADR and occupancy. In addition, we offer revenue management services to our franchisees to assist them in optimizing their room rates and minimizing the costs of reservation delivery.

*Central Reservation System ("CRS") -* Our central reservation system consists of our toll-free telephone reservation system, our proprietary internet sites, mobile phone and tablet reservation applications, interfaces with global distribution systems, and other internet reservations sites. We strive to improve the percentage of business delivered by the CRS as the room nights reserved through these channels are typically at higher average daily room rates than the reservations booked directly through the property. In addition, increasing the percentage of business delivered through the CRS improves our value proposition to a hotel owner and therefore assists in the retention of existing franchisees and the acquisition of new franchisees.

Our CRS provides a data link to our franchised properties as well as to the travel reservation systems, such as Amadeus, Galileo, SABRE, and Worldspan, which facilitate the reservation process for travel agents and corporate travelers. We also offer rooms for rent on our website (http://www.choicehotels.com) and mobile applications as well as those of OTAs and other third-party internet referral and booking services.

Our toll-free telephone reservation system primarily utilizes third-party call center service providers. The reservation agents are trained on the reservation system and they have a goal of matching each caller with a Choice-branded hotel that meets the caller's needs. We also operate a call forwarding program through which our franchisees can leverage our central reservation system capabilities by forwarding reservation calls received directly by the property to one of our reservation centers. Typically, this helps to reduce the hotel's front desk staffing needs, improves customer service, and results in a higher average daily room rate than the reservations booked directly through the property.

We continue to implement our integrated reservation and distribution strategy to help improve the delivery of reservations, reduce franchisee costs, and improve franchisee satisfaction by enhancing our website, http://www.choicehotels.com. We design our marketing campaigns to drive reservation traffic directly to our proprietary channels to minimize the impact that third party reservation sites may have on the pricing of our franchisees' inventory. In addition, we have introduced programs such as our Lowest Price Guarantee program, which has significantly reduced the ability of the third-party travel intermediaries to undercut the published rates at our franchisees' hotels. Further, we selectively distribute our franchisees' inventory to key third-party travel intermediaries that we have established agreements with to help drive additional business to our franchisees' hotels. These agreements typically offer our brands a preferred placement on these third-party booking sites at reduced transaction fees. We continue to educate our individual franchisees about the risk of an unfavorable impact to their business from contracting with booking sites when we do not have preferred agreements. We currently have agreements with many, but not all, of the major online third-party booking sites.

We also continue to upgrade our technology to ensure that our CRS can effectively handle the current and future volume on digital channels and support the industry's shift toward accelerated digital communications and guest experience

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personalization. In support of these initiatives, the Company developed choiceEDGE, which is a cloud-based software to manage all distribution for the Company by optimizing rate, inventory, availability, shopping, booking, and reservations for its website, mobile apps, and third-party distribution partners.

*Property Management Systems -* ChoiceADVANTAGE, which is our proprietary property and yield management system that the significant majority of our hotels utilize, is designed to help franchisees maximize profitability and compete more effectively by assisting them in managing their room inventory, rates, and reservations. ChoiceADVANTAGE synchronizes each hotel's inventory with our central reservation system, which gives our reservation sales agents and other proprietary channels the last room sell capabilities at every hotel. Our property management system also includes a proprietary revenue management feature that calculates and suggests the optimum rates based on each hotel's past performance and projected occupancy. These tools are critical to business delivery and yield improvements as they facilitate a franchisee's ability to effectively manage hotel operations, determine appropriate rates, help drive occupancy, and participate in our marketing programs. ChoiceADVANTAGE, which is a cloud-based solution, helps to reduce each hotel's investment in on-site computer equipment, which typically results in a lower total cost of ownership for the property management systems as compared to the traditional on-site solutions.

*Quality Assurance Programs -* Consistent quality standards are critical to the success of a hotel franchise. We have established quality standards for all of our franchised brands that cover cleanliness, condition, brand standards and minimum service offerings. We inspect most properties for compliance with our quality standards before allowing a property to open as one of our franchised brands. The compliance of existing franchisees with quality standards is monitored through scheduled and unannounced quality assurance reviews conducted by a third-party at the property and through the use of guest surveys. Franchise properties that fail to maintain a minimum score are reinspected on a more frequent basis until the deficiencies are cured, or until such properties are terminated. To encourage compliance with quality standards, various brand-specific incentives and awards are used to reward franchisees that maintain consistent quality standards. We identify franchisees whose properties operate below minimum quality standards and assist them to comply with brand specifications. Franchisees who fail to improve on identified quality issues may be subject to consequences ranging from written warnings, the payment of re-inspection(s), non-compliance and guest satisfaction fees, attendance at mandatory training programs, and ultimately the termination of the franchise agreement. Actual consequences, if any, are determined in the Company's discretion on a case-by-case basis and may take into account a variety of factors apart from a franchisee's level of compliance with our quality standards and brand specifications.

*Training -* We maintain a training department that conducts mandatory and voluntary training programs for all franchisees and general managers. Regularly scheduled regional and national training meetings are also conducted for owners and general managers. We offer an interactive computer and mobile-based training system to help train hotel employees in real-time as well as at their own pace. Additional training is conducted through a variety of methods, including group instruction seminars and live online instructor-led programs.

*Opening Services -* We maintain an opening services department that ensures incoming hotels meet or exceed brand standards and are properly displayed in our various reservation distribution systems to help ensure that each incoming hotel opens successfully. We also maintain a design and construction department to assist franchisees in refurbishing, renovating, or constructing their properties prior to or after joining the system. Department personnel assist franchisees in meeting our brand specifications by providing technical expertise and cost-savings suggestions.

***Competition***

Competition among franchise lodging brands is strong with regard to attracting potential franchisees, retaining existing franchisees, and generating reservations for franchisees. Franchise contracts are typically long-term in nature, but most allow either the hotel owner or the Company to terminate the agreement at mutually agreed upon anniversary dates.

We believe that the hotel operators choose a franchisor based primarily on the value and quality of each franchisor's brand(s) and services and the extent to which affiliation with that franchisor may increase the franchisee's reservations and profits. We also believe that the hotel operators select a franchisor in part based on the franchisor's reputation among other franchisees and the success of its existing franchisees.

Since our franchising revenues are generated primarily as a percentage of the franchisees' gross room revenues, our prospects for growth are largely dependent upon the ability of our franchisees to compete in the lodging market, our ability to retain existing franchisees, our ability to convert our competitor's franchisees and independent hotels to our brands, and the ability of existing and potential franchisees to obtain financing to construct new hotel properties.

The ability of a hotel to compete in the lodging industry may be affected by a number of factors, including the location and quality of the property, the abilities of the franchisee, the number and quality of competing lodging facilities nearby, its affiliation with a recognized name brand, and national and local economic conditions. We generally believe the effect of local

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economic conditions on our results is substantially reduced by our range of products and room rates and the geographic diversity of our franchised properties, which are open and operating in 49 states, the District of Columbia, and 50 countries and territories outside the U.S.

We believe that our focus on core business strategies, combined with our financial strength and size, geographic diversity, scale, and distribution, will enable us to remain competitive in the lodging industry.

***Service Marks and Other Intellectual Property***

The service marks Ascend Collection, Cambria, Choice Hotels, Choice Privileges, Clarion, Clarion Pointe, Comfort Inn, Comfort Suites, Country Inn & Suites by Radisson, Econo Lodge, Everhome Suites, MainStay Suites, Park Inn by Radisson, Park Plaza, Quality, Radisson, Radisson Blu, Radisson Collection, Radisson Individuals, Radisson Inn & Suites, Radisson Red, Rodeway Inn, Sleep Inn, Suburban Studios, WoodSpring Suites, and related marks and logos are material to our business. All of the material marks are registered or have registrations pending with the U.S. Patent and Trademark Office. We seek to protect our brands and marks throughout the world, although the strength of legal protection available varies from country to country. Depending on the jurisdiction, trademarks and other registered marks are valid as long as they are in use and/or their registrations are properly maintained and they have not been found to have become generic.

***Seasonality***

The lodging industry is seasonal in nature. For most hotels, demand is lower from November through February than during the remainder of the year. Our principal source of revenues is franchise fees, which is based on the gross room revenues of our franchised properties. The Company's franchise fee revenues reflect the industry's seasonality and historically have been lower in the first and fourth quarters than in the second and third quarters.

***Regulation***

Our business is subject to various U.S. and international regulations, including the regulations of the Federal Trade Commission ("FTC"), various states and certain other foreign jurisdictions (including Australia, France, Canada, and Mexico) that relate to the sale of franchises. The FTC requires franchisors to make extensive disclosures to prospective franchisees, and a number of states in which our franchisees operate require registration and disclosure in connection with franchise offers and sales. In addition, several states have "franchise relationship laws" that, among other things, limit the ability of the franchisor to terminate franchise agreements or to withhold consent to the renewal or transfer of franchise agreements.

Our franchisees are responsible for compliance with all laws and government regulations applicable to the hotels they own or operate.

With respect to our owned and managed hotels, we are subject to the laws governing our relationship with employees, including minimum wage requirements, overtime, working conditions, and work permit requirements.

In addition, our business is subject to numerous federal, state and local government regulations, including those relating to the preparation and sale of food and beverages (such as health and liquor license laws), safety and health standards, building and zoning requirements, tax laws, and laws governing employee relations, including minimum wage requirements, overtime, working conditions and work permit requirements.

Further, we are subject to various U.S. federal, state, and international privacy and data protections laws, including the California Consumer Protection Act, the Virginia Consumer Data Protection Act, and the European Union General Data Protection Regulation, as well as privacy laws in Connecticut, Colorado, and Utah.

***Impact of Inflation and Other External Factors***

Franchise fees are impacted by the supply of hotel rooms within the lodging industry relative to the demand for rooms by travelers and inflation, amongst other external factors.

We expect to benefit in the form of increased franchise fees from the future growth in consumer demand for hotel rooms as well as growth in the supply of hotel rooms, to the extent it does not result in excess lodging industry capacity. However, a prolonged decline in the demand for hotel rooms will negatively impact our business.

Although we believe that increases in the rate of inflation will generally result in comparable increases in hotel room rates, severe inflation could contribute to a slowing of the economies in which we operate. Such a slowdown could result in reduced travel by both business and leisure travelers, and potentially less demand for hotel rooms, which could result in a reduction in room rates and fewer room reservations, all of which could negatively impact our revenues. A weak economy could also reduce the demand for new hotels, which negatively impacts our franchise fees revenues.

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Among other unpredictable external factors which may negatively impact us are wars, acts of terrorism, pandemics, high interest rates, stress on the U.S. banking system, gasoline shortages, severe weather, and the risks described in Item 1A. Risk Factors.

**Human Capital Management**

As a franchisor and hotel management company, one of our greatest assets is our associates. We seek to attract and retain the best talent in the hospitality, franchising, and technology industries and to provide an open and welcoming environment for all of our associates. The quality of our talent delivers a high performing organization that drives positive business outcomes for the Company, our shareholders, our franchisees, and hotel owners.

Our Board of Directors provides oversight on certain human capital matters through two committees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Human Capital and Compensation Committee - Providing a broad scope of oversight on talent, including: (1) overall associate wellbeing, (2) succession planning for the top 60 leadership roles, (3) talent management and leadership development oversight for the top 150 leadership roles, (4) oversight of pay goals, and (5) overall organizational engagement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Diversity Committee - Overseeing our efforts to develop and sustain a welcoming culture for all associates, foster belonging, and promote equal access and opportunity for everyone.

*Career Development* 

We empower over 1,700 associates across the globe to enhance their careers by providing a career framework that allows them to understand and proactively manage their career path potential. Guided by a personalized development plan, each associate is empowered to identify and develop the skills and competencies necessary to expand the scope of their work or prepare for their next, and future, desired roles. As of December 31, 2025, the Company had 1,562 U.S. and 192 international associates, excluding employees at our 13 managed hotels.

Leadership development programs offer level specific career-building experiences, increasing the potential for broader levels of responsibility and leadership. These programs focus on competency-based self-development, creating customized action plans for growth and development, and the transformation of functional managers to business leaders, increasing their potential for broader levels of responsibility.

The Company conducts talent review and succession planning discussions across all levels. The talent landscape is reviewed with the Board of Directors semi-annually, focusing primarily on senior leadership levels.

Further, 11 Choice Resource Groups ("CRGs") allow groups of associates to come together based on shared affinities, communities, life experiences, and/or interests. Each CRG is open for all associates to join, and everyone is welcome at all CRG events. Associates are invited to participate as CRG Members, Community Builders, and CRG Chairs. The CRGs provide support, contribute to personal and career development, provide networking opportunities, and enhance wellbeing and engagement.

*Choice's Culture of Respect and Belonging*

At Choice, we strive to create an environment where every associate feels welcome, wanted, and respected. Part of how we deliver on this promise is by weaving belonging-focused initiatives throughout all levels of the enterprise, focusing on three core commitments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inclusion – Striving to build a workforce where all associates, regardless of background, have an opportunity to thrive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fair and Competitive Pay – Committed to promoting equal opportunity in all aspects of the talent lifecycle, inclusive of fair and competitive pay regardless of background.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Trust, Belonging, and Engagement – Fostering a culture where associates are inspired, engaged, and feel like they belong.

We remain committed to delivering fair and competitive pay across all roles, including those in our Managed Hotels division. To uphold this commitment, we conduct fair pay analyses for U.S.-based positions and make adjustments in pay as needed, as well as report the findings to the Board of Directors for transparency and accountability.

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*Health, Wellbeing, and Engagement*

Choice Hotels remains committed to advancing the health, well-being, and engagement of our associates, recognizing that a strong workforce drives superior performance for our hotel owners and shareholders. In 2025, we enhanced programs that support mental health, financial resilience, and social connectedness. These initiatives reinforce our culture of care and strengthen retention and productivity.

Choice Hotels differentiates itself through a holistic and culturally aligned approach to associate wellbeing. Our strategy integrates physical, mental, and financial health into a single framework, offering innovative programs such as diabetes and obesity management, mental health panels, and financial coaching. Beyond benefits, we embed wellbeing into our culture of belonging and psychological safety, ensuring every associate feels welcome, wanted, and respected through initiatives like Choice Resource Groups and social connectedness campaigns.

We measure impact through engagement and experience surveys. In 2025, participation in our engagement survey reached 82%, and our engagement score exceeded industry benchmarks by six points demonstrating strong associate commitment to Choice's mission and confidence in our inclusive culture. These results underscore the link between associate well-being and sustained business performance.

*Award Winning Culture*

In 2025, Choice Hotels continued to earn recognition for excellence across multiple dimensions of our business and culture. We maintained our standing on Newsweek's "World's Most Trustworthy Companies" and TIME's "World's Best Companies" lists, underscoring our reputation for integrity and performance.

Additional accolades included Newsweek America's Most Responsible Companies, Time America's Best Companies, Forbes' Best Employers for Tech Workers, Computerworld's 2026 Best Places to Work, Comparably Best Company: Leadership, Happiness, Compensation, Perks and Benefits, Culture and CEO, and the Human Rights Campaign's Corporate 100 Equality Index. These achievements reflect our strategic focus on creating an inclusive, high-performing culture, and delivering long-term value for stakeholders.

 **Information about our Executive Officers** 

The name, age, title, present principal occupation, business address and other material occupations, positions, offices and employment of each of the executive officers of the Company as of December 31, 2025 are set forth below. The business address of each executive officer is 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852.

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|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Stewart W. Bainum, Jr. | &nbsp;&nbsp;79 | Chairman of the Board of Directors |
| Patrick S. Pacious | &nbsp;&nbsp;59 | President and Chief Executive Officer |
| Scott E. Oaksmith | &nbsp;&nbsp;54 | Chief Financial Officer |
| Dominic E. Dragisich | &nbsp;&nbsp;43 | Executive Vice President, Operations and Chief Global Brand Officer |
| Simone Wu | &nbsp;&nbsp;60 | Senior Vice President, General Counsel, Corporate Secretary & External Affairs |
| Patrick J. Cimerola | &nbsp;&nbsp;57 | Chief Human Resources Officer |
| Raul Ramirez Sanchez | 42 | Chief Segment and International Operations Officer |
| Noha Abdalla | 48 | Chief Marketing Officer |
| Anna Scozzafava | 45 | Chief Strategy Officer and Senior Vice President, Technology |

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*Stewart W. Bainum, Jr. -* Director from 1977 to 1996 and since 1997, serving as Chairman of the Board from March 1987 to November 1996 and since October 1997; Managing Member of Artis Senior Living, LLC, a developer-owner-operator of assisted living residences, since 2012; Board of Advisors of UCLA's School of Management; Director of White Oak Legacy, Inc. (f/k/a Realty Investment Company, Inc.) a real estate management and investment company, from December 2005 through December 2016 and Chairman from December 2005 through June 2009; Director of Sunburst Hospitality Corporation, a real estate developer, owner and operator, from November 1996 through December 2016 and Chairman from November 1996 through June 2009. Director of SunBridge Manager, LLC from September 2011 through December 2016. Mr. Bainum was a director of Manor Care, Inc. from September 1998 to September 2002, serving as Chairman from September 1998 until September 2001. From March 1987 to September 1998, he was Chairman and Chief Executive Officer of Manor Care, Inc. He served as President of Manor Care of America, Inc., and Chief Executive Officer of ManorCare Health Services, Inc., from March 1987 to September 1998, and as Vice Chairman of Manor Care of America, Inc., from June 1982 to March 1987.

*Patrick S. Pacious -* President and Chief Executive Officer since September 2017; President and Chief Operating Officer from May 2016 until September 2017; and Chief Operating Officer from January 2014 until May 2016. He was Executive Vice President, Global Strategy & Operations from February 2011 through December 2013. He was Senior Vice President Corporate Strategy and Information Technology from August 2009 to February 2011. He was Senior Vice President, Corporate Development and Strategy from December 2007 to August 2009. He was Vice President, Corporate Development and Innovation from May 2006 to December 2007 and was Senior Director of Corporate Strategy from July 2005 to May 2006. Prior to joining the Company, he was employed by BearingPoint Inc. as a Senior Manager from 2002 until 2005 and Arthur Andersen Business Consulting LLP as a Senior Manager from 1996 until 2002.

*Scott E. Oaksmith -* Chief Financial Officer since September 2023. He was previously Senior Vice President, Deputy Chief Financial Officer from May 2023 to September 2023 and Senior Vice President, Real Estate and Finance from March 2020 to September 2023. He was Senior Vice President, Finance & Chief Accounting Officer from May 2016 to March 2020. He was Controller of the Company from September 2006 until May 2016, was Senior Director & Assistant Controller from February 2004 to September 2006, and was Director, Marketing and Reservations, Finance from October 2002 until February 2004. Prior to joining the Company, he was employed by American Express Tax & Business Services, Inc. from January 1994 to October 2002, last serving as Senior Manager from October 2000 to October 2002.

*Dominic E. Dragisich -* Executive Vice President, Operations and Chief Global Brand Officer since September 2023. He was previously Chief Financial Officer from March 2017 to September 2023. Prior to joining the Company, he was employed by XO Communications as Chief Financial Officer from July 2015 to February 2017 and Vice President, Financial Planning and Analysis ("FP&A") and Strategic Finance from September 2014 to July 2015. Before that, he was Senior Director, IR Business Consultancy of Marriott International from October 2013 to September 2014, Global Director of FP&A of NII Holdings, Inc. from March 2012 to October 2013, and held various management positions at Deloitte Consulting from 2004 to 2012.

*Simone Wu -* Senior Vice President, General Counsel, Corporate Secretary & External Affairs since 2015. She was Senior Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer from 2012 to 2015. Prior to joining the Company in 2012, she was employed by XO Communications and its affiliates as Executive Vice President, General Counsel and Secretary from 2011 until 2012, Senior Vice President, General Counsel and Secretary from 2006 to 2011, Vice President, the acting General Counsel and Secretary from 2005 to 2006, Vice President and Assistant General Counsel from 2004 until 2005, and Senior Corporate Counsel from 2001 until 2004. Before that, she was Vice President of Legal and Business Affairs at LightSource Telecom, held legal and business positions at MCI and AOL, and began her legal career in 1989 at Skadden, Arps, Slate, Meagher & Flom. Ms. Wu serves on the Board of Alarm.com.

*Patrick J. Cimerola -* Chief Human Resources Officer since 2015. He was Senior Vice President, Human Resources and Administration from September 2009 to 2015. He was Vice President of Human Resources from January 2003 to September 2009. He was Sr. Director of Human Resources from January 2002 to January 2003.

*Raul Ramirez Sanchez -* Chief Segment and International Operations Officer since August 2023. He was Chief Strategy and International Operations Officer from October 2021 to August 2023. He was Senior Vice President, Head of International, Strategy & Enterprise FP&A from June 2020 until October 2021. He was Senior Vice President, International Strategy and Enterprise FP&A from August 2019 until June 2020 and Vice President, Strategic Finance and FP&A from August 2017 to August 2019. Prior to joining the Company, he was Head of Finance, XO Business Unit for Verizon Communications from February 2019 until August 2019 and was employed at XO Communications as Vice President, Financial Planning and Analysis and Corporate Development from September 2015 until January 2019.

*Noha Abdalla* - Chief Marketing Officer since August 2022. Prior to joining the Company, she was employed by MyEyeDr. as Chief Marketing Officer from November 2020 to August 2022. Before that, she was employed by Hilton from July 2018 to November 2020 as the Global Vice President, Social Media, and Global Vice President, Digital and Content Marketing, and by

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Capital One from September 2011 to March 2018 in various roles, most recently as Vice President, Digital Brand Strategy and Social Media.

*Anna Scozzafava* - Chief Strategy Officer and Senior Vice President, Technology since September 2023. She was previously Senior Vice President and General Manager, Extended Stay Brands from August 2023 through September 2023, and Vice President, Extended Stay Brands, Strategy & Operations from July 2019 through September 2023. She was also previously Vice President, Strategy and Planning from November 2017 through July 2019, Senior Director, Corporate Strategy and Planning from July 2016 through October 2017, Director, Corporate Strategy from January 2014 through June 2016, Manager, Corporate Strategy from October 2012 through December 2013, and Project Manager, Corporate and Business Strategy from May 2011 through October 2012. Prior to joining the Company, she was employed by Corporate Executive Board from December 2005 through May 2011.

**Item 1A. Risk Factors**

Choice Hotels International, Inc. and its subsidiaries are subject to various risks, which could have a negative effect on the Company and its financial condition, results of operations, and cash flows. These risks could cause actual results to differ from those expressed in certain "Forward-Looking Statements" contained in this Form 10-K as well as in other Company communications. Before you invest in our securities, you should carefully consider these risk factors together with all other information included in our publicly filed documents.

**Business and Operational Risks**

***We are subject to the operating risks common in the lodging and franchising industries.***

A significant portion of our revenue is derived from fees based on room revenues at hotels franchised under our brands. We also derive revenue from management fees from our managed hotels. As such, our business is subject, directly or through our franchisees, to the following risks common in the lodging and franchising industry, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the number of hotels operating under franchised brands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the relative mix of franchised hotels in the various lodging industry price categories;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in occupancy and room rates achieved by hotels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• desirability of hotel geographic location;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in general and local economic and market conditions, which can adversely affect the level of business and leisure travel, and therefore the demand for lodging and related services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inflationary conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• level of consumer unemployment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increases in operating costs that may not be able to be offset by increases in room rates, such as through increases in minimum wage levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increases in corporate-level operating costs, including increases in employee compensation and benefits, resulting in lower operating margins;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability and cost of capital to allow hotel owners and developers to build new hotels and fund investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in travel patterns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• global health developments, public health crises, pandemics, or epidemics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• travelers' fears of exposure to contagious diseases or to insect infestations in hotel rooms and certain geographic areas;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of earthquakes, hurricanes, fires, floods, and other natural disasters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in governmental regulations that influence or determine wages, benefits, prices or increase operating, maintenance or construction costs of us and our franchisees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes by governmental agencies and within relevant legal systems of prevailing opinion and interpretation of new or existing rules, regulations and legal doctrine, particularly those limiting the liability of franchisors for employment and general liability claims involving franchisees;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of any potential U.S. federal government shutdown;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• security concerns or travel restrictions (whether security-related or otherwise) imposed by governmental authorities that have the effect of discouraging or limiting travel to and from certain jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the costs and administrative burdens associated with compliance with applicable laws and regulations, including, among others, franchising, lending, privacy, marketing and sales, licensing, labor, climate change, employment and regulations applicable under the Office of Foreign Asset Control and the Foreign Corrupt Practices Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial condition of franchisees and travel related companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• franchisors' ability to develop and maintain positive relations with current and potential franchisees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in exchange rates or economic weakness in the U.S. affecting domestic and international travel.

***We depend on the skill, ability, and decisions of third-party operators.***

We utilize third-party operators to provide significant services, such as providing general reservation call center services, providing loyalty member call center support, providing data center co-location services, inspecting our franchisees and providing support, hardware and data for the use of our property management and central reservation services systems.

In addition, we rely on third-party providers to provide market and competitor information that is utilized in our strategic decision-making process. The failure of any third-party operator or provider to make decisions, perform their services, discharge their obligations, deal with regulatory agencies, provide accurate information and comply with laws, rules and regulations could result in material adverse consequences to our business.

***We are subject to certain risks related to our indebtedness.***

We cannot assure you that our business will generate sufficient cash flow from operations to enable us to pay our indebtedness or to fund our other liquidity needs. If we fail to generate sufficient cash flow from future operations to meet our debt service obligations, we may need to refinance all or a portion of our debt on or before maturity. We cannot assure you that we will be able to refinance any of our debt on attractive terms, commercially reasonable terms or at all. Our future operating performance and our ability to service, extend or refinance our indebtedness will be subject to future economic conditions and to financial, business, and other factors, many of which are beyond our control. Our present indebtedness and future borrowings could have important adverse consequences to us, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making it more difficult for us to satisfy our obligations with respect to our existing indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limiting our ability to obtain additional financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring a substantial portion of our cash flow to be used for principal and interest payments on the debt, thereby reducing our ability to use cash flow to fund working capital, capital expenditures, pay dividends and/or repurchase our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limiting our ability to respond to changing business, industry and economic conditions and to withstand competitive pressures, which may affect our financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• causing us to incur higher interest expense in the event of increases in interest rates on our borrowings that have variable interest rates or in the event of refinancing existing debt at higher interest rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limiting our ability to make investments or acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increasing our vulnerability to downturns in our business, our industry or the general economy and restricting us from making improvements or acquisitions or exploring business opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• placing us at a competitive disadvantage to competitors with less debt or greater resources; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subjecting us to financial and other restrictive covenants in our indebtedness the non-compliance with which could result in an event of default.

A portion of our borrowings are at variable rates of interest, and to the extent not protected with interest rate hedges, could expose us to market risk from adverse changes in interest rates. Unless we enter into interest rate hedges, if interest rates increase, our debt service obligations on the variable-rate indebtedness could increase significantly even though the amount borrowed would remain the same.

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***We are subject to certain risks related to litigation filed by or against us.***

Legal or governmental proceedings brought by or on behalf of franchisees, third-party owners of managed properties, employees or customers may adversely affect our financial results. We cannot predict with certainty the cost of defense, the cost of prosecution or the ultimate outcome of litigation filed by or against us, including, remedies or damage awards. Such litigation may involve, but is not limited to, actions or negligence by franchisees outside of our control. Our business along with the hospitality industry generally, faces risks that could cause damage to our reputation and to the value of our hotel brands, along with litigation-related fees and costs, in connection with claims related to purported incidents of human trafficking at hotel facilities. Our franchise agreements provide that we are not liable for the actions of our franchisees; however, there is no guarantee that we would be insulated from liability in all cases. Moreover, we may be involved in matters such as class actions, administrative proceedings, employment and personal injury claims, and litigation with or involving our relationship with franchisees and the legal distinction between our franchisees and us for employment law or general liability purposes, for which the cost and other effects of defense, settlements or judgments may require us to make disclosures or take other actions that may affect perceptions of our brand and products and adversely affect our business results.

***Our international operations are subject to political and monetary risks.***

We have franchised hotels open and operating in 50 countries and territories outside of the U.S. We also have made, and may in the future make, investments in foreign hotel franchisors. International operations generally are subject to greater economic, political, and other risks than those affecting the U.S. operations. In certain countries, these risks include the risk of war, conflict or civil unrest, political instability, disruptions caused by terrorist activities or otherwise, expropriation and nationalization.

Moreover, our international operations are subject to compliance with anti-corruption and anti-bribery laws and other foreign laws and regulations. While we have policies in place to enforce and monitor internal and external compliance with these laws, we cannot guarantee that our policies will always protect us from reckless or criminal acts committed by our employees, franchisees or third-parties with whom we work. The U.S. also imposes sanctions that restrict U.S. companies from engaging in business activities with certain persons or entities, foreign countries, or foreign governments that it determines are adverse to U.S. foreign policy interests. From time to time, we may face audits or investigations by one or more U.S. or foreign governmental agencies relating to our international business activities, compliance with which could be costly and time-consuming, and could divert our management and key personnel from our business operations. Further, investigations by regulatory agencies have been increasing and, therefore, it may become increasingly costly and time-consuming to maintain proper internal controls. If we are found liable for violations of anti-corruption or sanctions laws, we could incur criminal or civil liabilities which could have a material adverse effect on our results of operations, our financial condition and our reputation. Furthermore, the creation of new restrictions in these areas could increase our cost of operations, reduce our profits, or cause us to forgo development opportunities that would otherwise contribute to our profitability.

Additional factors may also impact our international operations. The laws of some international jurisdictions do not adequately protect our intellectual property and restrict the repatriation of non-U.S. earnings. Various international jurisdictions also have laws limiting the right and ability of non-U.S. entities to pay dividends and remit earnings to affiliated companies unless specified conditions have been met. In addition, revenues from international jurisdictions typically are earned in local currencies, which subjects us to risks associated with currency fluctuations. Currency devaluations and unfavorable changes in international monetary and tax policies could have a material adverse effect on our profitability and financing plans, as could other changes in the international regulatory climate. Our future performance could be adversely affected by weak economic conditions in any region where we operate, and uncertainty regarding the pace of economic growth in different regions of the world makes it difficult to predict future profitability levels. We intend to continue to expand internationally, which would make the risks related to our international operations more significant over time.

***Labor shortages could restrict our ability and the ability of franchisees to operate hotel properties or grow our business or result in increased labor costs that could adversely affect the results of operations.***

Our success depends in part on our ability to attract, retain, train, manage and engage employees. A number of factors may adversely affect the labor force available to us or our franchisees. If we or our franchisees are unable to attract, retain, train, manage and engage skilled individuals, the ability to staff and operate the hotels that we manage, own or franchise could be diminished, which could reduce customer satisfaction and adversely affect the reputation of our brands. Staffing shortages in various parts of the world also could hinder our ability to grow and expand our businesses. In addition, the efforts and abilities of our senior executives are important elements of maintaining our competitive position and driving future growth, and the loss of the services of one or more of our senior executives could result in challenges executing our business strategies or other adverse effects on our business.

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***Climate change and sustainability related concerns could have a material adverse effect on our business and results of operations.***

We are subject to the physical and transition risks associated with climate change and extreme weather events. These risks include changes in sea levels, water shortages, droughts, and natural disasters which may increase in frequency and severity; changing consumer preferences; and changes in laws and regulations related to climate change, regulating greenhouse gas emissions (including carbon pricing, cap and trade systems or a carbon tax), energy policies, and sustainability. Compliance with future climate-related legislation and regulation, and our voluntary efforts to achieve science-based emissions reduction targets, could be difficult and costly. Furthermore, standards for tracking and reporting such matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting these data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures), and other changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals. If we fail to achieve, or are perceived to have failed or been delayed in achieving, or improperly report our progress toward achieving these targets, it could negatively affect customer preference for our brands or investor confidence in our stock, as well as expose us to enforcement actions and litigation. Consumer travel preferences may also shift due to sustainability-related concerns or costs. Our owned, managed, and franchised hotels may experience higher costs of energy, higher insurance premiums or policies that do not fully cover all climate-related risks, or physical damage that could negatively impact their ability to operate. As a result of the foregoing, we may experience significant increased operating and compliance costs, operating disruptions or limitations, reduced demand, constraints on our growth, and physical damage to our hotels, all of which could adversely affect our profits or growth.

***We are incorporating artificial intelligence technologies into our processes and franchisee tools. These technologies may present business, compliance, reputational, and legal risks.***

If we fail to keep pace with rapidly evolving technological developments in artificial intelligence ("AI"), our competitive position and business results may suffer. The introduction of these technologies, particularly generative AI, into new or existing offerings may also result in new or expanded risks and liabilities, including enhanced governmental or regulatory scrutiny, litigation, copyright infringement, compliance issues, ethical concerns, security risks relating to private and/or confidential information, as well as other factors that could adversely affect our business, reputation, and financial results. If the content, analyses, or recommendations that AI programs assist in producing are, or are alleged to be, deficient, misleading, inaccurate, or biased, then our business, financial condition, and results of operations and our reputation may be adversely affected. In addition, it is possible that AI and machine learning-technology could be improperly utilized by employees while carrying out their responsibilities. The use of AI can lead to unintended consequences, such as generating content that appears correct but is factually inaccurate, misleading, or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies. AI also presents emerging ethical issues and if our use of AI becomes controversial, then we may experience brand or reputational harm, competitive harm, or legal liability.

**Risks Related to Our Franchise System**

***We may not grow our franchise system or we may lose business by failing to compete effectively or by failing to manage the reputations of our brands.***

Our success and growth prospects depend on the strength and desirability of our brands, particularly in the extended stay, midscale, and upper midscale hotel franchise chains which represents a significant portion of our business. We believe that hotel operators choose lodging franchisors based primarily on the value and quality of each franchisor's brand and services, the extent to which affiliation with that franchisor may increase the hotel operator's reservations and profits, and the franchise fees charged. Demographic, economic or other changes in markets may adversely affect the desirability of our brands and, correspondingly, the number of hotels franchised under the Company's brands.

We compete with other lodging companies for franchisees. As a result, the terms of new franchise agreements may not be as favorable as our current franchise agreements. For example, competition may require us to reduce or change fee structures, make greater use of financial incentives, including franchise agreement acquisition costs, loans and guaranties to acquire franchisees and/or reduce the level of property improvements required before operating under our brand names. This could potentially impact our cash flows and margins negatively. New competition may also emerge using different business models with a lesser reliance on franchise fees. In addition, an excess supply of hotel rooms or unfavorable borrowing conditions may discourage potential franchisees from expanding or constructing new hotels, thereby limiting a source of growth of the franchise fees received by us.

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Also, each of our hotel brands competes with major hotel chains in national and international markets and with independent companies in regional markets. Our ability to remain competitive and to attract and retain business and leisure travelers depends on our success in distinguishing our products and services from those offered by our competitors. If we are unable to compete successfully in these areas, this could adversely affect our market share and our results of operations. An adverse incident involving our franchisees or their guests, and any media coverage resulting therefrom, could also damage our brands and reputation.

Many factors influence our reputation and the value of our hotel brands including the perception held by guests, our franchisees, our other key stakeholders and the communities in which we do business. Our business faces increasing scrutiny related to environmental, social, and governance matters, and as a result we also face the risk of liability, boycotts, and damage to our reputation and the value of our hotel brands for any of our initiatives related to these matters or if we (or our franchisees) fail to act responsibly or comply with regulatory requirements in a number of areas, such as safety and security, responsible tourism, environmental stewardship, supply chain management, climate change, human trafficking, diversity, human rights, philanthropy and support for local communities.

The considerable increase in the use of social media over recent years has greatly accelerated the speed at which negative publicity, feedback, criticism and other information, whether or not based in fact, could spread and the scope of its dissemination, which could lead to litigation, increase our costs, or result in a negative impact on our reputation or loss of consumer confidence in our brands.

***We may not achieve our objectives for growth in the number of franchised hotels.***

The number of properties and rooms franchised under our brands significantly affects our results. There can be no assurance that we will be successful in achieving our objectives with respect to growing the number of franchised hotels in our system or that we will be able to attract qualified franchisees. The growth in the number of franchised hotels is subject to numerous risks, many of which are beyond the control of our franchisees or us. Among other risks, the following factors affect our ability to achieve growth in the number of franchised hotels:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our franchisees to open and operate additional hotels profitably. Factors affecting the opening of new hotels, or the conversion of existing hotels to a Choice brand, include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the availability of hotel management, staff and other personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the cost and availability of suitable hotel locations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the availability and cost of capital to allow hotel owners and developers to fund investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ cost effective and timely construction of hotels (which construction can be delayed due to, among other reasons, availability of financing, labor and materials availability, labor disputes, local zoning and licensing matters, and weather conditions); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ securing required governmental permits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to continue to enhance our reservation, operational and service delivery systems to support additional franchisees in a timely, cost-effective manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our formal impact policy, which may offer certain franchisees protection from the opening of a same-brand property within a specified distance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effectiveness and efficiency of our development organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our failure to introduce new brands that gain market acceptance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our dependence on our independent franchisees' skills and access to financial resources necessary to open the desired number of hotels; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract and retain qualified U.S. and international franchisees.

We are currently planning to further expand in many of the international markets where we currently operate, as well as in select new markets. This may require considerable management time as well as start-up expenses for market development before any significant revenues and earnings are generated. Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in existing markets may be affected by local economic and market conditions. Therefore, as

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we expand internationally, we may not experience the operating margins we expect, our results of operations may be negatively impacted and our stock price may decline.

***We may have disputes with the owners of our franchised hotels or their representative franchisee associations.***

Our responsibilities under our franchise agreements may be subject to interpretation and may give rise to disagreements in some instances. Such disagreements may be more likely when hotel returns are depressed as a result of economic conditions. We seek to resolve any disagreements in order to develop and maintain positive relations with current and potential hotel owners as well as their representative franchisee associations. However, failure to resolve such disagreements could result in litigation with outcomes that may be adverse to our economic interests.

***Under certain circumstances our franchisees may terminate our franchise contracts.***

We franchise hotels to independent third parties pursuant to franchise agreements. These agreements may be terminated, renegotiated or expire but typically have an initial term of between 10 and 30 years. These agreements also typically contain provisions permitting either party to terminate the franchise agreement upon designated anniversaries of the agreement under certain circumstances and depending on the particular hotel brand that is licensed to the franchisee. While our franchise agreements provide for liquidated damages to be paid to us by franchisees whose agreements have been terminated as the result of a violation of the provisions of the agreement, these damage amounts are typically less than the fees we would have received if the terminated franchisee fulfilled its contractual obligations. In addition, there can be no assurance that we will be able to replace expired or terminated franchise agreements, or that the provisions of renegotiated or new agreements will be as favorable as the provisions that existed before such expiration, replacement or renegotiation. Further, ownership of a significant number of franchise contracts by one or a small group of franchisees, particularly if concentrated within a particular brand, may compound risks of termination since a large number of properties could be terminated at once, decreasing the scope and representation of an impacted brand. As a result, our revenues could be negatively impacted by any of these events.

***Deterioration in the general financial condition of our franchisees may adversely affect our results.***

Our operating results are impacted by the ability of our franchisees to generate revenues at properties they franchise from us. An extended period of occupancy or room rate declines may adversely affect the operating results and financial condition of our franchisees. These negative operating conditions could result in the financial failure of our owners and result in a termination of the franchisee for non-payment of franchise fees or require the transfer of ownership of the franchise. In those instances where ownership is transferred, there can be no assurance that the new owners will choose to affiliate with our brands.

The hotel industry is highly competitive. Competition for hotel guests is based primarily on the level of service, quality of accommodations, convenience of locations and room rates. Our franchisees compete for guests with other hotel properties in their geographic markets. Some of their competitors may have substantially greater marketing and financial resources than our franchisees, and they may construct new facilities or improve their existing facilities, reduce their prices or expand and improve their marketing programs in ways that adversely affect our franchisees' operating results and financial condition. In addition, the ability of our franchisees to compete for guests directly impacts the desirability of our brands to current and prospective franchisees.

These factors, among others, could adversely affect the operating results and financial condition of our franchisees and result in declines in the number of franchised properties and/or franchise fees and other revenues derived from our franchising business. In addition, at times, the Company provides financial support to our franchisees via notes and guaranties. Factors that may adversely affect the operating results and financial condition of these franchisees may result in the Company incurring losses related to this financial support.

***We may not be able to recover advances for system services that we may at certain times provide to our franchisees.***

The Company is obligated to use the marketing and reservation fees it collects from the current franchisees comprising its various hotel brands to provide system services, such as marketing and reservations services, that are appropriate to fulfill our obligations under the Company's franchise agreements. In discharging our obligation to provide sufficient and appropriate system services, the Company has the right to expend funds in an amount reasonably necessary to ensure the provision of such services, regardless of whether or not such amount is currently available to the Company for reimbursement.

Under the terms of its franchise agreements, the Company has the contractually enforceable right to assess and collect from its current franchisees fees sufficient to pay for the system services the Company has provided or procured for the benefit of its franchisees, including fees to reimburse the Company for past services rendered. The Company's current franchisees are contractually obligated to pay any assessment the Company imposes on them to obtain reimbursement of any systems services advances regardless of whether the franchisees continue to generate gross room revenue and whether or not they joined the system following the deficit's occurrence. However, our ability to recover these advances may be adversely impacted by certain

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factors, including, among others, declines in the ability of our franchisees to generate revenues at properties they franchise from us. An extended period of occupancy or room rate declines or a decline in the number of hotel rooms in our franchise system could result in the generation of insufficient funds to recover system services advances as well as meet the ongoing system service needs of our franchisees.

***Our franchisees may fail to make the investments necessary to maintain or improve their properties, preference for our brands and our reputation could suffer and our franchise agreements with these franchisees could terminate.***

Our franchised properties are governed by the terms of franchise agreements. Substantially all of these agreements require property owners to comply with standards that are essential to maintaining our brand integrity and reputation. We depend on our franchisees to comply with these requirements by maintaining and improving properties through investments, including investments in furniture, fixtures, amenities and personnel.

Franchisees may be unable to access capital or unwilling to spend available capital when necessary, even if required by the terms of our franchise agreements. If our franchisees fail to make investments necessary to maintain or improve the properties we franchise, our brand preference and reputation could suffer. In addition, if franchisees breach the terms of our agreements with them, we may elect to exercise our termination rights, which would eliminate the revenues we earn from these properties and cause us to incur expenses related to terminating these relationships. These risks become more pronounced during economic downturns.

***We and our franchisees are reliant upon information technology systems to operate our business and remain competitive, and any disruption or malfunction or failure to adapt to technological developments could adversely affect our business.***

The lodging industry depends upon the use of sophisticated information technology and systems including those utilized for reservations, property management, procurement, hotel revenue management, operation of our customer loyalty programs, communications, and our administrative systems. We also maintain physical facilities to support these systems and related services.

Information technology and systems that we rely upon are or may be vulnerable to damage or interruption from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• penetration by individuals or entities seeking to disrupt operations or misappropriate information and other breaches of security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fraud, misuse and other unauthorized access to customer loyalty program accounts or interference with these systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• computer viruses, software errors, and design or security vulnerabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• power losses, computer systems failures, internet and telecommunications or data network failures, service provider negligence, improper operation by or supervision of employees, user error, physical and electronic losses of data and similar events; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• earthquakes, hurricanes, fires, floods, and other natural disasters.

Disruptions, failures, or malfunctions in technology can impact our revenue as well as our ability to retain existing franchisees and attract new franchisees to our system. Further, rewards earned through our customer loyalty programs are vulnerable to fraud, misuse and unauthorized access for financial gain or other improper purposes. Any loss of data or funds, security breaches or even unsuccessful attempts at unauthorized access could harm our reputation, our relationship with our customer loyalty program members and our relationship with co-branded credit card companies. Further, such events could expose us to potential litigation as well as expenses associated with remediation and other impacts.

In addition, the operation of many of these systems is dependent upon third-party data communication networks and software upgrades, maintenance, and support. These technologies and systems can be expected to require refinements, updates or replacements, and there is the risk that advanced new technologies will be introduced. There can be no assurance that as various systems and technologies become outdated or new technology is required, we will be able to replace or introduce them as quickly as our competitors or within budgeted costs for such technology.

There can also be no assurance that improvements or upgrades to technologies and systems will maintain or improve the performance, reliability, security, and integrity of our systems or that we will achieve the benefits that may have been anticipated from such improvements or upgrades. Further, there can be no assurance that disruptions of the operation of these systems will not occur as a result of failures related to our internal or third-party systems and support.

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**Risks Related to Our Brands**

***We are subject to the risks relating to the acquisition of new brands.***

From time-to-time, we consider acquisitions of new brands that complement our current portfolio of brands. In many cases, we will be competing for these opportunities with third parties who may have substantially greater financial resources or different or lower acceptable return requirements than we do. There can be no assurance that we will be able to identify acquisition candidates, acceptable new markets or complete transactions on commercially reasonable terms or at all. If transactions are consummated or new markets entered, there can be no assurance that any anticipated benefits will actually be realized. Similarly, there can be no assurance that we will be able to obtain additional financing for acquisitions or investments, or that the ability to obtain such financing will not be restricted by the terms of our existing debt agreements. Furthermore, if events or changes in circumstances indicate that the carrying value of the acquisition costs are not recoverable, we may be required to record a significant non-cash impairment charge in our financial statements which may negatively impact our results of operations and shareholders' equity.

***New brands may not be accepted by franchisees and consumers.***

We have developed and launched additional hotel brands, such as Cambria Hotels, Clarion Pointe, and Everhome Suites, and may develop and launch additional brands in the future. To achieve long-term success for new brands, we may be required to provide capital support to incentivize franchisee development and/or to make direct investments, and these extensions of capital support and direct investments may not yield the expected or anticipated returns and may be disruptive to our asset-light business model. There can be no assurance regarding the level of acceptance of new brands in the development and consumer marketplaces, that costs incurred to develop and grow the brands will be recovered or that the anticipated benefits from these new brands will be realized.

***Increasing use by consumers of alternative internet reservation channels may decrease loyalty to our brands and our existing distribution channels, and may influence our distribution strategies, in ways that may adversely affect us.***

A significant, and increasing, percentage of hotel rooms are booked through internet travel intermediaries. If these intermediaries are successful in continuing to increase their share of bookings or are otherwise successful in executing strategies to strengthen their commercial and contractual ties to our hotels and hotel guests, these intermediaries may be able to obtain higher commissions, reduced room rates, or other significant contractual and operational concessions from our franchisees or us.

Moreover, some of these internet travel intermediaries hope that consumers will eventually develop brand loyalties to their reservations systems rather than to our lodging brands and our existing distribution channels. As the internet travel intermediary industry continues to consolidate, and/or if well-known or well-financed companies decide to enter the internet travel intermediary space, the resources that the internet travel intermediaries have available and may be willing to apply toward their own marketing and customer loyalty could significantly exceed the resources that we are able to apply for the same purposes.

The increasing use of alternative internet reservation channels influences the way in which we utilize and market the benefits of our existing distribution channel. For example, we have introduced programs such as "Best Internet Rate Guarantee" and a closed-user group pricing to encourage bookings directly through our distribution system. However, there can be no assurance that current margins or levels of utilization associated with these or other strategies will succeed in increasing the booking percentages to our direct channels at the expense of channels controlled by travel intermediaries. In addition, our implementation of programs such as closed-user group pricing may cause travel intermediaries to respond by diverting business away from our hotels by removing or marginalizing our hotels in search results on their platforms.

Finally, there can be no assurance that we will be able to maintain stable commercial or contractual relationships with every significant internet travel intermediary, and any resulting instability may have a significant adverse impact on our business, if for example, our brands are not available through one or more of such intermediaries. Relatedly, we may not be able to negotiate mutually acceptable agreements or renegotiate extensions of agreements with existing internet travel intermediaries upon their expiration, and any such renegotiated or extended agreement may not be entered into on terms as favorable as the provisions that existed before such expiration, replacement or renegotiation.

***An increase in the use of AI enabled third-party internet services to book online hotel reservations could adversely impact our business.***

Some of our hotel rooms are booked by internet travel intermediaries and other online travel service providers. AI is being used to book hotels through targeted in-feed ads that leverage user data to display relevant hotel options based on interests and location, as well as through AI-powered chatbots that can answer booking questions directly within an app, allowing users to seamlessly initiate the booking process while watching videos on the app platform. In addition, AI can be used to personalize

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the hotel booking experience by showing users ads for hotels they may be interested in based on their in-app activity. Our business and profitability could be harmed to the extent that online intermediaries succeed in significantly shifting loyalties from our brands to their travel services utilizing these AI tools, diverting bookings away from our direct online channels, or through their fees, increasing the overall cost of internet bookings for our hotels.

***Development and brand support activities that involve our co-investment or financing and guaranty support for third parties or development of hotels may result in losses.***

As a result of our program to make financial support available to developers in the form of franchise agreement acquisition costs, loans, credit support, such as guaranties, and equity investments, we are subject to investment and credit risks that we would not otherwise be exposed to as a franchisor. In particular, when we make loans to franchisees, agree to provide loan guaranties for the benefit of franchisees, or make equity investments in franchisees, we are subject to all generally applicable credit and investment risks, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• construction delays, cost overruns, or acts of God, such as earthquakes, hurricanes, fires, floods, or other natural disasters that may increase overall project costs or result in project cancellations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the possibility that the parties with which we have entered into a co-investment, hotel development, financing, or guaranty relationships could become bankrupt or otherwise lack the financial resources to meet their obligations, or could have or develop business interests, policies, or objectives that are inconsistent with ours; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that conditions within credit or capital markets may limit the ability of franchisees or us to raise additional debt or equity that may be required for completion of projects.

In addition to general credit and capital markets risks, we face specific risks stemming from our ability to assess the existing and future financial strength of the franchisee and its principals, the development/construction abilities of the franchisee or third-party parties hired by us to develop hotels, the expected performance of the hotel in light of the forecasted general, regional and market-specific economic climate, and the ability to negotiate for, value, and if necessary collect security for our loans or obligations. If we do not accurately assess these risks, our assumptions used to make these estimates prove inaccurate, or situations in the credit market or hospitality industry change in a manner we did not anticipate, our loans and investments may become impaired and/or we may be required to make payment under guaranties we have issued. In such instances, there is no assurance that we will be able to recover any or all of such impaired or paid amounts, in which case we will experience losses which could be material.

***Our involvement in hotel ownership and hotel development activities to stimulate the development of new brands may result in exposure to losses and be disruptive to our asset-light business model.***

While our business model is primarily an asset-light, franchising focused business, there are instances where, typically to support the growth of new hotel brands, we may acquire existing operating hotels and acquire real estate for the purpose of developing new hotels. Of the open hotels in our system, we currently own 10 Cambria hotels, four Everhome Suites hotel, one Radisson RED hotel, one Radisson Blu hotel, and one Country Inn & Suites hotel. We are also developing Cambria hotels and Everhome Suites hotels on a standalone basis and with joint venture partners. As a result, fluctuations in fair market values could require us to record a significant non-cash impairment charge in our financial statements in a particular period which may negatively impact our results of operations and shareholders' equity.

As a result of our hotel acquisition, development, and ownership programs, we are subject to the real estate-based investment risk that we would not otherwise be exposed to as a franchisor. In particular, we face specific risks stemming from (1) our ability to assess the fair value of the real estate, (2) the location's suitability for development as a hotel, (3) the availability of zoning or other local approvals needed for development, and (4) the availability and pricing of capital. Although we actively seek to minimize these risks prior to acquiring real estate, there is no assurance that we will be able to recover the costs of our investments, in which case we will experience losses which could be material.

***Failure to protect our trademarks and other intellectual property could impact our business.***

We believe that our trademarks and other intellectual property are fundamental to our brands and our franchising business. We generate, maintain, license and enforce a substantial portfolio of trademarks and other intellectual property rights. We enforce our intellectual property rights to protect the value of our trademarks, our development activities, to protect our good name, to promote our brand name recognition, to enhance our competitiveness and to otherwise support our business goals and objectives. We rely on trademark laws to protect our proprietary rights. Monitoring the unauthorized use of our intellectual property is difficult. Litigation has been and may continue to be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of

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operations. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the U.S. From time to time, we apply to have certain trademarks registered. There is no guarantee that such trademark registrations will be granted. We cannot assure you that all of the steps we have taken to protect our trademarks in the U.S. and foreign countries will be adequate to prevent imitation of our trademarks by others. The unauthorized reproduction of our trademarks could diminish the value of our brand and its market acceptance, competitive advantages, or goodwill, which could adversely affect our business.

**Risks Related to Different Lines of Business**

***We may not be able to generate significant procurement services revenue from our platform business.***

We are focused on expanding our platform business to provide value-added travel related services to our guests and generate revenues for the Company. As platform revenue has increased, as reflected in our procurement services revenue, we are increasingly dependent on various vendors who make low-cost products available to us and our franchisees and partners who market their services directly to our guests. There can be no assurance that we will be able to retain our relationships with such parties or be able to renew arrangements on favorable terms. There is also no assurance that we will be able to identify new methods for decreasing hotel-operating costs by increasing penetration within our existing franchise system, enhancing our existing vendor relationships, and/or creating new vendor relationships.

***Our investment in new business lines is inherently risky and could disrupt our core business.***

In the past, we have both acquired and launched internally developed business divisions. We expect to continue to invest in alternate lines of business and may in the future invest in other new business strategies, products, services, and technologies.

Such investments generally involve significant risks and uncertainties, including distraction of management from our core franchising operations, unanticipated expenses, inadequate return of capital on our investments, losses of key customers or contracts, and unidentified issues and risks not discovered in our development or analysis of such strategies and offerings.

Because these new ventures are inherently risky, there can be no assurance that our investments will be successful. If we do not realize the financial or strategic goals that are contemplated at the time we commit to significant investments in support of these ventures, our reputation, financial condition, operating results, and growth trajectory may be impacted.

***Investing jointly through affiliates decreases our ability to manage risk.***

We have invested and expect to continue to invest in real estate and other hospitality related affiliates. Affiliate members often have shared control over the operation of the affiliate assets and therefore these investments may involve risks such as the possibility that the member in an investment might become bankrupt or not have the financial resources to meet its obligations or have economic or business interests or goals that are inconsistent with our business interests or goals. Consequently, actions by a member might subject us to additional risk, require greater financial support from the Company than initially forecasted (including but not limited to buying out a partner in an affiliate resulting in hotel ownership by the Company) or result in actions that are inconsistent with our business interests or goals.

**Risks Related to Cybersecurity and Data Privacy**

***We are subject to the risks related to cybersecurity.***

The hospitality industry is under increasing attack by cyber-criminals. Because of the scope and complexity of our information technology systems and those of our franchisees, our reliance on third-party vendors, and the nature of the cyber threat landscape, our systems may be vulnerable to intrusions, disruptions, and other significant malicious cyber-enabled incidents, including through viruses, malware, ransomware, denial of service attacks, phishing, hacking, deepfake or malicious social engineering schemes, and similar attacks by criminal actors, foreign governments, activists, and terrorists. Cybercriminals have increasingly demonstrated advanced capabilities, such as use of zero-day vulnerabilities, and rapid integration of new technology such as generative AI and machine learning technologies. Our systems may also be vulnerable to human error, negligence, fraud, or other misuse. These attacks can be deliberate attacks or unintentional events that could result in theft, unauthorized access, unauthorized alteration, loss, fraudulent or unlawful use of sensitive information or cause interruptions, outages, or delays in our business, loss of data, or render us unable to operate our business. Accordingly, an extended interruption in any of our systems or the systems of our franchisees could significantly curtail, directly and indirectly, our ability to conduct our business and generate revenue. Like most large multinational companies, we have experienced, and expect to continue to be subject to, cybersecurity threats and attempts to disrupt or gain access to our systems and those operated by our franchisees, and attempts to affect the confidentiality, availability, and integrity of our data, none of which are known to be material to the Company to date.

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We seek to minimize the impact of these cybersecurity incidents through the use of various technologies, processes and practices designed to help protect our networks, systems, computers and data from attack, damage or unauthorized access. We continuously assess our security posture, seek to implement appropriate risk reduction measures, enhance our operating processes, improve our defenses and take other measures to strengthen our cybersecurity program. Cybersecurity threats are constantly evolving and becoming more sophisticated, which increases the difficulty and cost of detecting and defending against them. Incidents can be difficult to detect for long periods of time and can involve complex or extended assessment and remediation periods, which could magnify the severity of an incident. Accordingly, there are no guarantees that our cybersecurity practices and our efforts to implement appropriate risk reduction measures will be sufficient to prevent or mitigate attacks, and our defense strategies may ultimately prove ineffective as threat actors evolve and become more sophisticated. While we carry cyber breach, property, and business operation interruption insurance, we may not be sufficiently compensated for all losses we may incur. These losses include not only a loss of revenues but also potential reputational damage to our brands, serious disruption to our operations, investigations, litigation, and liability due to regulatory fines or penalties or pursuant to our contractual obligations. Furthermore, the Company may also incur substantial remediation costs to repair system damage as well as satisfy liabilities for stolen assets or information that may further reduce our profits. Such losses may have a material adverse effect on our business, financial condition, and results of operations.

***Failure to maintain the integrity of internal or customer data could result in faulty business decisions, damage of reputation, and/or subject us to costs, fines or lawsuits.***

Our business requires the collection and retention of large volumes of sensitive data, including credit card numbers and other personal information of our employees, franchisees and guests as such information is entered into, processed, summarized, and reported by the various information systems we use. The integrity and protection of that franchisee, guest, employee, and company data is critical to us and our reputation. Our customers have a high expectation that we will adequately protect their personal information, and the failure to do so could result in a material adverse impact to our reputation, operations, and financial condition. Further, the regulatory environment surrounding information security and privacy is increasingly demanding, both in the U.S. and in the international jurisdictions in which we operate. If the Company fails to maintain compliance with the various U.S. and international laws and regulations applicable to the protection of such data or with the Payment Card Industry Data Security Standards, the Company's ability to process such data could be adversely impacted and expose the Company to fines, litigation or other expenses or sanctions.

***Privacy laws and regulations could adversely affect our ability to transfer guest data and market our products effectively and could be applied to impose costs, fines, and operational conditions on our business in the event of perceived non-compliance, and could otherwise impact our results from operations.***

Our business operations are subject to various U.S. and international privacy and data protection laws. Any future changes or restrictions in U.S. or international privacy and data protection laws could adversely affect our operations, including our ability to transfer guest data, which could adversely impact guest bookings. For example, the California Privacy Rights Act (CPRA) imposes new compliance requirements on businesses that collect personal information from California residents. Compliance with requirements imposed by the CPRA, the European Union General Data Protection Regulation (GDPR) and similar laws, or any future changes in such laws or additional restrictions, could result in significant costs and require us to change some of our business practices. Failure to comply could expose the Company to fines, litigation, or other expenses or sanctions, as well as reputational harm.

We also rely on a variety of direct marketing techniques, including telemarketing, SMS, email, and postal mailings. Any future restrictions in laws such as Telemarketing Sales Rule, Controlling the Assault of Non-Solicited Pornography & Marketing Act (CAN-SPAM Act), and various U.S. state laws, or new federal laws regarding marketing and solicitation or international data protection laws that govern these activities could adversely affect the continuing effectiveness of telemarketing, SMS, email, and postal mailing techniques and could force changes in our marketing strategies. If this occurs, we may not be able to develop adequate alternative marketing strategies, which could impact the amount and timing of our revenues. We also obtain access to potential customers from travel service providers and other companies with whom we have substantial relationships and market to some individuals on these lists directly or by including our marketing message in the other company's marketing materials. If access to these lists was prohibited or otherwise restricted, our ability to develop new customers and introduce them to our products could be impaired.

**Legal and Regulatory Risks**

***Government franchise and tax regulation could impact our business.***

The FTC, various states, and certain foreign jurisdictions where we market franchises regulate the sale of franchises. The FTC requires franchisors to make extensive disclosure to prospective franchisees but does not require registration. A number of states in which our franchisees operate require registration and disclosure in connection with franchise offers and sales. In

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addition, several states in which our franchisees operate have "franchise relationship laws" that limit the ability of the franchisor to terminate franchise agreements or to withhold consent to the renewal or transfer of these agreements. While our business has not been materially affected by such regulation, there can be no assurance that this will continue or that future regulation or legislation will not have such an effect.

The determination of our worldwide provision for income taxes and other tax liabilities requires estimation and significant judgment and there are many transactions and calculations where the ultimate tax determination is uncertain. Like many other multinational corporations, we are subject to tax in multiple U.S. and foreign tax jurisdictions and have structured our operations to reduce our effective tax rate. Our determination of our tax liability is always subject to audit and review by applicable U.S. and foreign tax authorities. Any adverse outcome of any such audit or review could have a negative effect on our business, operating results and financial condition. The ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made.

***We may be deemed to be a joint employer with our franchisees under certain new laws, rules, and regulations.***

Companies that operate franchise systems may be subject to liabilities and claims relating to the franchisor/franchisee relationship, such as for allegedly being a joint employer with a franchisee. Changes in laws or regulations relating to this relationship could result in a determination that we are a "joint employer" with our franchisees or that our franchisees are part of one unified system subject to joint and several liability. Such a determination could subject us to liability for employment-related and other liabilities of our franchisees and could cause us to incur other costs that have a material adverse effect on our results of operations and profit.

**Anti-takeover and Control Risks**

***Anti-takeover provisions may prevent a change in control.***

Our restated certificate of incorporation and the Delaware General Corporation Law each contain provisions that could have the effect of making it more difficult for a party to acquire, and may discourage a party from attempting to acquire, control of our Company without the approval of our Board of Directors. These provisions, together with the concentration of our share ownership, could discourage tender offers or other bids for our common stock at a premium over market price.

***The concentration of share ownership may influence the outcome of certain matters.***

The concentration of share ownership by our directors and affiliates allows them to substantially influence the outcome of matters requiring shareholder approval. As a result, acting together, they may be able to control or substantially influence the outcome of matters requiring approval by our shareholders, including the elections of directors and the approval of significant corporate transactions, such as mergers, acquisitions, and equity compensation plans. In addition, our share repurchase program may further concentrate our share ownership in our directors and affiliates and increase their influence on such matters.

**Item 1B. Unresolved Staff Comments**

None.

**Item 1C. Cybersecurity**

**Risk Management and Strategy**

Cybersecurity is an important element of the Company's overall enterprise risk management program. The Company has a multilayered system intended to assess, identify, and manage cybersecurity risks. The system is designed to help protect the Company's information assets and operations from internal and external cyber threats. The system is used to understand and manage risks to help support business resiliency and to protect data subjects' information from unauthorized access or attack, as well as to secure the Company's networks, systems, devices, products, and services. Cybersecurity is incorporated into the Company's enterprise risk management program through membership within and regular reporting to the Enterprise Risk Committee.

The Company devotes significant resources to help protect and evolve the security of its computer systems, software, networks, and other technology assets, and the Company's cybersecurity risk management program includes physical, administrative, and technical safeguards. The Company's cybersecurity policies, standards, and procedures include data breach response plans, which are reviewed regularly. The Company annually assesses its cybersecurity program and safeguards against the National Institute of Standards of Technology Cybersecurity Framework (the "Framework"). The Company's cyber incident response plan is designed to help coordinate our response to, and recovery from, cybersecurity incidents, and includes processes intended

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to triage, assess the severity of, escalate, contain, investigate, and remediate incidents, as well as to comply with applicable legal obligations.

The Company endeavors to continually refine its policies and practices to help protect its platform, adapt to changes in regulations, identify potential and emerging security risks, and develop mitigations for those risks. For example, the Company seeks to conduct incident simulations and assessments regularly to help discover potential vulnerabilities, with the objective to improve decision-making and prioritize and promote the monitoring and reporting across compliance functions. As part of its overall risk mitigation strategy, the Company also maintains cyber insurance coverage.

The Company engages external parties, including consultants, computer security firms, and risk management and governance experts, as part of its cybersecurity program. For example, the Company's independent assessor provides a periodic assessment of the Company's risk posture to help identify threats as well as opportunities to enhance safeguards. Annually, the Company's adherence to the Payment Card Industry Data Security Standard is assessed by an external party which includes one or more penetration tests of the Company's applicable technological environment. The Company has engaged an independent security assessor to evaluate the Company's cybersecurity program against the Framework. Additionally, the cybersecurity program is subject to regular assessment by internal audit and the Company's external auditors. The Company participates in the Retail & Hospitality Information Sharing and Analysis Center ("RH-ISAC") where peer companies are engaged on industry trends and emerging threats, including those relating to cybersecurity.

To help oversee and identify risks from cybersecurity threats associated with the Company's use of third-party service providers, the Company has a third-party information risk management program intended to minimize the likelihood of misuse of Choice data by third parties and business partners and requires that third-party service providers complete a periodic security risk assessment. Depending upon the identified risk, actions such as obligating the third party to remediate the identified deficiencies or termination of the relationship may occur. Also, depending upon the nature of the relationship and data, third party agreements include security and privacy provisions that oblige third parties to abide with applicable regulations and employ reasonable security controls.

The Company's Board of Directors does not believe that there are currently any risks from cybersecurity threats that have materially affected, or are reasonably likely to materially affect, the Company or its business strategy, financial condition, results of operations, or cash flows. However, we have been the target of cybersecurity incidents and we expect them to continue as cybersecurity threats continue to evolve. We cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced an undetected cybersecurity incident in the past or that we will not experience such an incident in the future. For more information on the risks from cybersecurity threats that we face, refer to Part I, Item 1A. Risk Factors.

**Governance and Oversight**

The Audit Committee of the Company's Board of Directors maintains oversight over cybersecurity risk, in coordination with the full Board of Directors. The Board of Directors and the Audit Committee receive and provide feedback on quarterly updates from management regarding cybersecurity, including highlights of recent incidents throughout the industry and the emerging threat landscape, as well as the prompt notice of any cybersecurity threats or incidents with the potential to significantly impact the Company, including its financial condition, results of operations, and cash flows, and regular updates about incidents with a lesser impact. Cybersecurity updates are rotated quarterly between the Board of Directors and the Audit Committee. The reports generally focus on items such as risk reduction efforts, emerging and existing threats, training initiatives, the status of projects to strengthen cybersecurity, emerging security and privacy regulatory policies and regulations, cybersecurity technologies and best practices, cyber readiness, results of third-party assessments, mitigation efforts, and response plans.

The Company has a Chief Information Security Officer ("CISO") whose team is responsible for leading company-wide cybersecurity strategy, policy, standards, and processes and works across all of the units of the Company to help protect the Company and its employees against cybersecurity risks. The CISO has significant cybersecurity expertise, including prior cybersecurity leadership in banking and insurance organizations. The CISO holds a Master of Business Administration, as well as Certified Information Systems Security Professional, Certified Information Systems Auditor, and Certified Information Security Manager cybersecurity-related certifications. The CISO also serves as Chair of the Board for RH-ISAC.

The Company has also established a cross-functional cybersecurity oversight committee led by our CISO serving as the chair and consisting of executive-level leaders, that is responsible for the Company's cybersecurity, disaster recovery, and business continuity programs. The Company's internal audit team also provides independent assurance on the functional components of the Company's cybersecurity program and reports the results of these audits in its quarterly reports to the Audit Committee.

In an effort to prevent and detect cyber threats, the Company annually provides all employees, including part-time and temporary, with cybersecurity and privacy training, which covers timely and relevant topics, including social engineering,

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phishing, password protection, data protection, physical security, and educates employees on the importance of reporting all incidents immediately.

**Item 2. Properties**

Our principal executive offices are located at 915 Meeting Street, Suite 600, North Bethesda, Maryland 20852 and are leased from a third party.

We also lease office space in Scottsdale, Arizona and Minneapolis, Minnesota. The Company also maintains several international regional offices.

Management believes that the Company's existing properties and property commitments are sufficient to meet its present needs and does not anticipate any difficulty in securing additional or alternative space, as needed, on terms that are acceptable to the Company.

We discuss our limited hotel development and ownership program and strategy in Item 1. Business and Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. As of December 31, 2025, our wholly-owned hotels consist of 10 Cambria hotels (located in Bloomington, MN, Burbank, CA, Columbia, SC, Denver, CO, El Segundo, CA, Fort Worth, TX, Houston, TX, New Orleans, LA, Pittsburgh, PA, and Portland, OR), four Everhome Suites hotels (located in Bastrop, TX, Bowling Green, KY, Fayetteville, NC, and San Antonio, TX), a Radisson Blu hotel (located in Bloomington, MN), a Radisson RED hotel (located in Minneapolis, MN), and a Country Inn & Suites hotel (located in Bloomington, MN).

We believe that all of our owned and leased properties are in generally good physical condition with the need for only routine repairs and maintenance and periodic capital improvements.

**Item 3. Legal Proceedings**

The Company is not a party to any material litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations, or cash flows.

**Item 4. Mine Safety Disclosures**

None.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

Our common shares are traded on the New York Stock Exchange under the symbol "CHH." As of February 10, 2026, there were 800 holders of record of the Company's common stock.

**ISSUER PURCHASES OF EQUITY SECURITIES**

The following table sets forth the purchases and redemptions of the Company's common stock made by the Company during the year ended December 31, 2025. Refer to the Liquidity and Capital Resources section of Item 7. Management's Discussion and Analysis of Financial Condition and Resulted of Operations for more information.

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|:---|:---|:---|:---|:---|
| **Period** | **Total <br>Number of Shares <br>Purchased or Redeemed** | **Average Price<br>Paid per Share** | **Total Number of Shares**<br>**Purchased as Part of**<br>**Publicly** <br>**Announced**<br>**Plans or Programs**<sup>(1)</sup> | **Maximum <br>Number of Shares that <br>may yet be Purchased <br>Under the Plans or Programs, <br>End of Period** |
| **January 1, 2025 through January 31, 2025** | **129106** | $**143.45** | **129106** | **3648021** |
| **February 1, 2025 through February 28, 2025** | **96825** | **149.77** | **96825** | **3551196** |
| **March 1, 2025 through <br>March 31, 2025** | **230211** | **137.68** | **162828** | **3388368** |
| **April 1, 2025 through <br>April 30, 2025** | **191086** | **125.18** | **190693** | **3197675** |
| **May 1, 2025 through <br>May 31, 2025** | **163110** | **129.86** | **162851** | **3034824** |
| **June 1, 2025 through <br>June 30, 2025** | **1080** | **110.90** | **304** | **3034520** |
| **July 1, 2025 through <br>July 31, 2025** | **—** | **—** | **—** | **3034520** |
| **August 1, 2025 through August 31, 2025** | **1619** | **124.50** | **—** | **3034520** |
| **September 1, 2025 through September 30, 2025** | **—** | **—** | **—** | **3034520** |
| **October 1, 2025 through October 31, 2025** | **349** | **106.50** | **—** | **3034520** |
| **November 1, 2025 through November 30, 2025** | **31** | **92.13** | **—** | **3034520** |
| **December 1, 2025 through December 31, 2025** | **278333** | **91.79** | **277757** | **2756763** |
| **Total** | **1091750** | $**124.32** | **1020364** | **2756763** |

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(1)During the year ended December 31, 2025, the Company redeemed 71,386 shares of common stock from employees to satisfy the option price and the minimum tax-withholding requirements related to the exercising of options and the vesting of performance vested restricted stock units and restricted stock grants. These redemptions were not part of the share repurchase program.

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**STOCKHOLDER RETURN PERFORMANCE**

The graph below matches Choice Hotels International, Inc.'s cumulative 5-year total shareholder return on common stock with the cumulative total returns of the NYSE Composite index, the S&P 500 Hotels, Resorts & Cruise Lines index, and the S&P 400 Consumer Discretionary index. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2020 to December 31, 2025.

![RDG Graph.jpg](chh-20251231_g1.jpg)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **12/31/20** | **6/30/21** | **12/31/21** | **6/30/22** | **12/31/22** | **6/30/23** | **12/31/23** | **6/30/24** | **12/31/24** | **6/30/25** | **12/31/25** |
| Choice Hotels International, Inc. | $100.00 | $111.58 | $146.69 | $105.54 | $106.95 | $111.86 | $108.63 | $114.36 | $137.08 | $123.02 | $92.81 |
| NYSE Composite | $100.00 | $115.19 | $120.68 | $103.11 | $109.39 | $115.86 | $124.46 | $134.68 | $144.12 | $155.95 | $169.62 |
| S&P 500 Hotels, Resorts & Cruise Lines | $100.00 | $110.97 | $119.84 | $81.23 | $90.79 | $125.13 | $150.99 | $167.18 | $199.57 | $221.93 | $226.60 |
| S&P 400 Consumer Discretionary | $100.00 | $125.16 | $127.69 | $90.90 | $100.83 | $113.02 | $125.32 | $130.53 | $137.12 | $129.86 | $129.35 |

---

*The stock price performance included in this graph is not necessarily indicative of future stock price performance.*

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**Item 6. Reserved**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the consolidated financial condition and the results of operations of Choice Hotels International, Inc. and its subsidiaries (together as "Choice," the "Company," "we," "us," or "our") contained in this report. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes.

**Overview**

We are primarily a hotel franchisor operating in 49 states, the District of Columbia, and 50 countries and territories. As of December 31, 2025, we had 7,575 hotels with 656,825 rooms open and operating, and 825 hotels with 77,862 rooms under construction, awaiting conversion or approved for development, or committed to future franchise development on outstanding master development agreements (collectively, "pipeline") in our global system. Our brand names include Clarion®, Clarion Pointe™, Comfort Inn®, Comfort Suites®, Country Inn & Suites® by Radisson, Sleep Inn®, Quality®, Park Inn by Radisson®, Everhome Suites®, WoodSpring Suites®, MainStay Suites®, Suburban Studios™, Radisson Blu®, Park Plaza®, Cambria® Hotels, Ascend Collection®, Radisson RED®, Radisson Individuals®, Radisson®, Radisson Collection®, Radisson Inn & Suites<sup>SM</sup>, Econo Lodge®, and Rodeway Inn®.

The hotel franchising business represents the Company's primary operations. The Company's U.S. operations are conducted through direct franchising relationships, the ownership of 17 open and operating hotels, and the management of 13 hotels (inclusive of four owned hotels), while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships. Master franchising relationships are governed by master franchising agreements, which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee. As a result of our master franchise relationships and international market conditions, our revenues are primarily concentrated in the U.S. Therefore, our description of our business is primarily focused on the U.S. operations.

Our Company generates revenues, income, and cash flows primarily from our hotel franchising operations. Revenues are also generated from partnerships with qualified vendors and travel partners that provide value-added solutions to our platform of guests and hotels, hotel ownership, and other ancillary sources. Historically, the hotel industry has been seasonal in nature. For most hotels, demand is typically lower in November through February than during the remainder of the year. Our principal source of revenue is franchise fees, which is based on the gross room revenues or the number of rooms at our franchised properties. The Company's franchise and managed fees, as well as its owned hotels' revenues, normally reflect the industry's seasonality and historically have been lower in the first and fourth quarters than in the second and third quarters of the year.

Because our primary focus is hotel franchising, we benefit from the economies of scale inherent in the franchising business. The fee and cost structure of our franchising business provides opportunities to improve our operating results by increasing the number of franchised hotel rooms and the royalty rates in our franchise contracts. In addition, our operating results can also be improved through our company-wide efforts related to improving property-level performance and expanding the number of partnerships with travel-related and other companies with products and services that appeal to our franchisees and guests.

The primary factors that affect the Company's results are: the number and relative mix of hotel rooms in the various hotel lodging price categories, growth in the number of hotel rooms owned and under franchise, occupancy and room rates achieved by the hotels in our system, the average royalty rates achieved in our franchise agreements, the level of franchise sales and relicensing activity, the number of qualified vendor arrangements and partnerships and the level of engagement with these partners by our franchisees and guests, and our ability to manage costs. The number of rooms in our hotel system and the occupancy and room rates at those hotel properties significantly affect the Company's results because our fees are based upon room revenues or the number of rooms at owned and franchised hotels. The key industry standard for measuring hotel-operating performance is revenue per available room ("RevPAR"), which is calculated by multiplying the percentage of occupied rooms by the average daily room rate ("ADR") realized. Our variable overhead costs associated with the franchise system growth of our established brands have historically been less than the incremental royalty fees generated from new franchises. Accordingly, over the long-term, the continued growth of our franchise business should enable us to realize the benefits from the operating leverage in place and improve our operating results.

We are required by our franchise agreements to use the marketing and reservation fees we collect for system-wide marketing and reservation activities. These expenditures, which include advertising costs and the costs to maintain our central reservations systems, enhance awareness and consumer preference for our brands and deliver guests to our franchisees. Greater awareness and preference promote long-term growth in business delivery to our franchisees and increases the desirability of our brands to hotel owners and developers, which ultimately increases the franchise fees earned by the Company. Additionally, the

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Company's management agreements include cost reimbursements, which is primarily related to payroll costs at the managed hotels where the Company is the employer.

Our Company articulates its mission as a commitment to our franchisees' profitability by providing our franchisees with hotel franchises that strive to generate the highest return on investment of any hotel franchise. We have developed an operating system dedicated to our franchisees' success that focuses on delivering guests to their hotels and reducing hotel operating costs.

We believe that executing on our strategic priorities creates value for our shareholders. Our Company focuses on the following strategic priorities:

*Profitable Growth -* Our success is dependent on improving the performance of our hotels, increasing the size of our system by selling additional hotel franchises with a focus on revenue-intense chain scales and markets, improving our royalty rates, expanding our qualified vendor and partnership programs and maintaining a disciplined cost structure. We attempt to improve our revenues and overall profitability by providing a variety of products and services designed to increase business delivery and/or reduce operating and development costs. These products and services include national marketing campaigns, a guest loyalty program, a central reservation system, property and yield management programs and systems, revenue management services, quality assurance standards, and qualified vendor relationships and partnerships with companies that provide products and services to our franchisees and guests. We believe that healthy brands, which deliver a compelling return on investment, will enable us to sell additional hotel franchises and raise royalty rates. We have multiple brands that meet the needs of many different types of guests, and can be developed at various price points and applied to both new and existing hotels. This ensures that we have brands suitable for creating growth in a variety of market conditions. Improving the performance of the hotels in our system, strategically growing the system through additional franchise sales, and improving franchise agreement pricing while maintaining a disciplined cost structure are the keys to profitable growth.

*Maximizing Financial Returns and Creating Value for Shareholders* - Our capital allocation decisions, including our capital structure and the uses of capital, are intended to maximize our return on invested capital and create value for our shareholders. Since our business has not historically required significant reinvestment of capital, we typically utilize cash in ways that management believes provides the greatest returns to our shareholders, which include acquisitions, share repurchases, and dividends. Refer to the Liquidity and Capital Resources section in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for more information regarding our capital returns to shareholders.

In addition to our hotel franchising business, we have also developed or acquired 17 open and operating hotels. We have strategically developed hotels to increase the presence of our newly introduced brands in the U.S., drive greater guest satisfaction and brand preference, and ultimately increase the number of franchise agreements awarded. When developing hotels, we seek key markets with strong growth potential that will deliver strong operating performance and improve the recognition of our brands. Our hotel development and ownership efforts currently focus on the Cambria Hotels and Everhome Suites brands. We believe our owned hotels provide us the opportunity to support and accelerate the growth of these brands. We do not anticipate owning hotels on a permanent basis and we expect to target dispositions to a franchisee encumbered with a long-term Choice franchise agreement in the future.

A key component of our strategy for owned hotels is to maximize revenues and manage costs. We strive to optimize revenues by focusing on revenue management, increasing guest loyalty, expanding brand awareness with targeted customer groupings, and providing superior guest service. Other than four owned hotels, we currently do not manage our owned hotels but utilize the services of third-party hotel management companies that provide their own employees. We manage costs by setting performance goals for our hotel management companies and optimizing distribution channels.

The Company also allocates capital to financing, investment, and guaranty support to incentivize franchise development for certain brands in strategic markets. The timing and amount of these investments are subject to market and other conditions.

We believe our growth investments and strategic priorities, when properly implemented, will enhance our profitability, maximize our financial returns, and continue to generate value for our shareholders. The ultimate measure of our success will be reflected in the items below.

*Results of Operations* - Franchise and management fees, operating income, net income, and diluted earnings per share ("EPS") represent the key measures of our financial performance. These measures are primarily driven by the operations of our hotel franchise system and therefore, our analysis of the Company's results of operations is primarily focused on the size, performance, and the potential growth of the hotel franchise system as well as our variable overhead costs.

Our discussion of our results of operations excludes reimbursable franchise marketing and reservation revenues and expenses and the management agreement cost reimbursements and expenses included in the Company's revenue for reimbursable costs from franchised and managed properties and reimbursable expenses from franchised and managed properties. The Company's franchise agreements require the payment of marketing and reservation fees to be used by the Company for the expenses associated with providing franchise services such as national marketing, media advertising, and central reservation systems. The

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Company is obligated to expend the marketing and reservation fees it collects from its franchisees in accordance with the franchise agreements. Furthermore, the franchisees are required to reimburse the Company for any deficits generated by these marketing and reservation system activities. Over time, the Company expects the cumulative revenues and expenses of reimbursable components to break even and, therefore, no income or loss will be generated from the reimbursable marketing and reservation system activities. Additionally, the Company's management agreements include cost reimbursements, which is primarily related to payroll costs at the managed hotels where the Company is the employer. As a result, the Company generally excludes the revenue for reimbursable costs from franchised and managed properties and reimbursable expenses from franchised and managed properties from the analysis of its results of operations.

Due to the seasonal nature of the Company's hotel franchising and management business and the multi-year investments required to support the franchise operations, quarterly and/or annual surpluses or deficits may be generated. During the years ended December 31, 2025, 2024, and 2023, reimbursable expenses from franchised and managed properties exceeded revenue for reimbursable costs from franchised and managed properties by $47.1 million, $18.2 million, and $32.8 million, respectively.

Refer to the Operations Review section in MD&A for additional analysis of our results of operations.

*Liquidity and Capital Resources -* Historically, the Company has generated significant cash flows from operations*.* Since our business has not historically required a significant reinvestment of capital, we typically utilize cash in ways that management believes provide the greatest returns to our shareholders, which include acquisitions, share repurchases, and dividends.

We believe the Company's cash on hand, available borrowing capacity under the senior unsecured revolving credit facility, cash flows from operations, and access to additional capital in the debt markets is sufficient to meet the expected future operating, investing, and financing needs of the business. Refer to the Liquidity and Capital Resources section in MD&A for additional analysis.

*Inflation -* We believe that moderate increases in the rate of inflation will generally result in comparable or greater increases in hotel room rates. We continue to monitor future inflation trends along with the corresponding impacts to our business.

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**Operations Review**

A summary of the financial results for the years ended December 31, 2025 and 2024 was as follows:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| **REVENUES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise and management fees | $**673197** | $669637 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Partnership services and fees | **113789** | 99491 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | **121373** | 113459 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **72230** | 64060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue for reimbursable costs from franchised and managed properties | **616204** | 638192 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | **1596793** | 1584839 |
| **OPERATING EXPENSES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | **328958** | 312388 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business combination, diligence and transition costs | **4701** | 17233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **59715** | 51953 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | **91684** | 83148 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable expenses from franchised and managed properties | **663336** | 656344 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | **1148394** | 1121066 |
| **Operating income** | **448399** | 463773 |
| **OTHER EXPENSES AND (INCOME), NET** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | **91148** | 87131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | **(6237)** | (8646) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain from an acquisition of a joint venture | **(100025)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of assets | **(713)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | **—** | 331 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other (gains) losses, net | **(6989)** | 1641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in net loss (gain) of affiliates | **14324** | (12329) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses and (income), net** | **(8492)** | 68128 |
| **Income before income taxes** | **456891** | 395645 |
| **Income tax expense** | **86945** | 95980 |
| **Net income** | $**369946** | $299665 |

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*Results of Operations*

For the year ended December 31, 2025, the Company recognized income before income taxes of $456.9 million, which is a $61.2 million increase from the year ended December 31, 2024. The increase in income before income taxes was primarily due to a $100.0 million gain from an acquisition of a joint venture in 2025 and an $8.6 million increase in other (gains) losses, net, all of which were partially offset by a $26.7 million decrease in the equity in net loss (gain) of affiliates and a $15.4 million decrease in operating income.

Operating income decreased $15.4 million primarily due to a $29.0 million increase in the net reimbursable deficit from franchised and managed properties, a $16.6 million increase in selling, general and administrative expenses, and a $7.8 million increase in depreciation and amortization expense, all of which were partially offset by a $14.3 million increase in partnership services and fees, an $8.2 million increase in other revenues, and a $12.5 million decrease in business combination, diligence and transition costs.

*Franchise and Management Fees*

Franchise and management fees increased $3.6 million primarily due to an $11.5 million increase in international royalty fees and an $8.2 million increase in revenues generated from programs, platforms, and services associated with the Company's franchise operations, all of which were partially offset by a $14.9 million decrease in U.S. royalty fees.

U.S. royalty fees decreased $14.9 million to $439.8 million for the year ended December 31, 2025 from $454.7 million for the year ended December 31, 2024. The decrease in U.S. royalty fees was primarily due to a 3.0% decrease in U.S. system-wide

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RevPAR as a result of a 1.6% decrease in average daily rates and an 80 basis points decrease in occupancy, and a 2.9% decrease in open and operating U.S. hotel rooms, all of which were partially offset by a system-wide 8 basis points increase in the average royalty rate from 5.06% for the year ended December 31, 2024 to 5.14% for the year ended December 31, 2025.

A summary of the operating performance for the Company's U.S. franchised hotels, organized by chain scale, was as follows:

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **Change** | **Change** | **Change** | **Change** |
| | **Average Daily Rate** | **Occupancy** | **RevPAR** | **Average<br>Daily Rate** | **Occupancy** | **RevPAR** | **Average<br>Daily Rate** | **Occupancy** | **Occupancy** | **RevPAR** |
| **Upscale & Above** <sup>(1)</sup>  | $**149.75** | **56.3%** | $**84.35** | $151.91 | 57.7% | $87.67 | (1.4)% | (140) | bps | (3.8)% |
| **Midscale & Upper Midscale** <sup>(2)</sup> | **99.21** | **54.9%** | **54.50** | 100.91 | 55.9% | 56.41 | (1.7)% | (100) | bps | (3.4)% |
| **Extended Stay** <sup>(3)</sup> | **66.10** | **69.1%** | **45.67** | 64.12 | 71.2% | 45.66 | 3.1% | (210) | bps | —% |
| **Economy** <sup>(4)</sup> | **70.73** | **46.7%** | **33.02** | 72.15 | 47.1% | 33.97 | (2.0)% | (40) | bps | (2.8)% |
| **Total** | $**95.05** | **55.6%** | $**52.85** | $96.64 | 56.4% | $54.51 | (1.6)% | (80) | bps | (3.0)% |

---

(1) Includes Ascend Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.

(2) Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands.

(3) Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands.

(4) Includes Econo Lodge and Rodeway brands.

A summary of the U.S. hotels and rooms by brand in our franchise system as of December 31, 2025 and 2024 was as follows:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **Variance** | **Variance** | **Variance** | **Variance** |
| | **Hotels** | **Rooms** | **Hotels** | **Rooms** | **Hotels** | **%** | **Rooms** | **%** |
| **Comfort** <sup>(1)</sup> | **1652** | **128836** | 1674 | 131495 | (22) | (1.3)% | (2659) | (2.0)% |
| **Quality Inn** | **1571** | **113613** | 1627 | 118725 | (56) | (3.4)% | (5112) | (4.3)% |
| **Econo Lodge** | **599** | **34658** | 642 | 37528 | (43) | (6.7)% | (2870) | (7.6)% |
| **Rodeway** | **432** | **23838** | 447 | 24948 | (15) | (3.4)% | (1110) | (4.4)% |
| **Country** | **402** | **32333** | 422 | 33771 | (20) | (4.7)% | (1438) | (4.3)% |
| **Sleep Inn** | **404** | **28199** | 415 | 29118 | (11) | (2.7)% | (919) | (3.2)% |
| **Ascend Collection** | **236** | **38426** | 233 | 38589 | 3 | 1.3% | (163) | (0.4)% |
| **WoodSpring Suites** | **284** | **34176** | 256 | 30846 | 28 | 10.9% | 3330 | 10.8% |
| **Clarion** <sup>(2)</sup> | **181** | **18562** | 193 | 19944 | (12) | (6.2)% | (1382) | (6.9)% |
| **MainStay Suites** | **143** | **10337** | 141 | 10157 | 2 | 1.4% | 180 | 1.8% |
| **Suburban Studios** | **115** | **9558** | 111 | 9159 | 4 | 3.6% | 399 | 4.4% |
| **Cambria Hotels** | **76** | **10189** | 76 | 10344 |  | —% | (155) | (1.5)% |
| **Radisson** <sup>(3)</sup> | **52** | **10090** | 57 | 13390 | (5) | (8.8)% | (3300) | (24.6)% |
| **Park Inn** | **15** | **1294** | 27 | 2926 | (12) | (44.4)% | (1632) | (55.8)% |
| **Everhome Suites** | **25** | **2870** | 7 | 799 | 18 | 257.1% | 2071 | 259.2% |
| **Total U.S. Franchises** | **6187** | **496979** | 6328 | 511739 | (141) | (2.2)% | (14760) | (2.9)% |

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(1)Includes the Comfort family of brand extensions, including Comfort Inn and Comfort Suites.

(2)Includes the Clarion family of brand extensions, including Clarion and Clarion Pointe.

(3)Includes the Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.

International royalty fees increased $11.5 million to $41.3 million for the year ended December 31, 2025 from $29.8 million for the year ended December 31, 2024. The increase in international royalty fees was primarily due to an increase in the size of the international franchise system by 130 hotels (from 1,258 hotels as of December 31, 2024 to 1,388 hotels as of December 31, 2025) and 17,775 rooms (from 142,071 rooms as of December 31, 2024 to 159,846 rooms as of December 31, 2025), an increase in royalty fees as a result of the acquisition of the remaining 50% equity interest in Choice Hotels Canada, and an increase in international RevPAR.

*Partnership Services and Fees*

Partnership services and fees increased $14.3 million primarily due to an increase in the fees generated from the Company's co-branded credit card agreement and qualified vendors.

*Other Revenues*

Other revenues increased $8.2 million primarily due to an increase in liquidated damages resulting from the early termination of franchise agreements and other franchising revenues.

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*Selling, General and Administrative* 

Selling, general and administrative expenses increased $16.6 million primarily due to a $9.2 million increase in the provisions for credit losses on accounts receivable balances, a $4.5 million increase in costs related to the global enterprise resource planning ("ERP") system implementation, a $3.8 million increase in operating guarantee payments for a portfolio of managed hotels which was acquired in connection with the Company's purchase of Radisson Hotels Americas, and a $2.2 million increase in expenses to operate Choice Hotels Canada during the year ended December 31, 2025, all of which were partially offset by a $2.4 million litigation settlement that was recognized during the year ended December 31, 2024.

*Business Combination, Diligence and Transition Costs*

Business combination, diligence and transition costs decreased $12.5 million primarily due to the termination of the Wyndham acquisition pursuit on March 8, 2024, which was partially offset by the transaction costs associated with the acquisition of Choice Hotels Canada that were recognized during the year ended December 31, 2025.

*Depreciation and Amortization*

Depreciation and amortization expense increased $7.8 million primarily due to a $4.0 million increase in amortization expense for intangible assets as a result of the acquisition of the remaining 50% equity interest in Choice Hotels Canada in July 2025 and a $1.7 million increase in depreciation expense related to the opening of five owned hotels during the year ended December 31, 2025.

*Gain from an Acquisition of a Joint Venture*

During the year ended December 31, 2025, the Company recognized a $100.0 million gain on the fair value remeasurement of its previously held 50% equity investment in Choice Hotels Canada as a result of acquiring the remaining 50% equity interest in Choice Hotels Canada in July 2025.

*Other (Gains) Losses, net*

Other (gains) losses, net increased $8.6 million primarily due to a net loss of $8.3 million on the sales of equity securities during the year ended December 31, 2024, which was partially offset by dividend income of $1.5 million that was recognized during the year ended December 31, 2024.

*Equity in Net Loss (Gain) of Affiliates*

Equity in net loss (gain) of affiliates decreased $26.7 million primarily due to $6.5 million of non-recurring joint venture formation transaction costs that were associated with the Company entering into a new joint venture agreement, and a new loan facility, to develop and operate Everhome Suites in certain strategic markets during the year ended December 31, 2025, a $10.0 million decrease in the equity earnings from our unconsolidated affiliates, a $3.6 million decrease in equity earnings as a result of acquiring the remaining 50% equity interest in Choice Hotels Canada during the year ended December 31, 2025, and a distribution from an unconsolidated affiliate, which sold its underlying assets, resulting in the recognition of a $7.2 million gain during the year ended December 31, 2024.

*Income Tax Expense*

The Company's effective income tax rates were 19.0% and 24.3% for the years ended December 31, 2025 and 2024, respectively. The effective income tax rate for the year ended December 31, 2025 was lower than the U.S. federal income tax rate of 21.0% primarily due to the impact of a $100.0 million non-taxable gain from an acquisition of a joint venture and federal income tax credits, which were partially offset by the impact of state income taxes and tax expense related to compensation. The effective income tax rate for the year ended December 31, 2024 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes and tax expense related to compensation, which were partially offset by federal income tax credits.

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**Operations Review**

A summary of the financial results for the years ended December 31, 2024 and 2023 was as follows:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2024** | **2023** |
| **REVENUES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise and management fees | $**669637** | $652060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Partnership services and fees | **99491** | 91790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | **113459** | 97641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **64060** | 55097 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue for reimbursable costs from franchised and managed properties | **638192** | 647577 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | **1584839** | 1544165 |
| **OPERATING EXPENSES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | **312388** | 312701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business combination, diligence and transition costs | **17233** | 55778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **51953** | 45038 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | **83148** | 71474 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable expenses from franchised and managed properties | **656344** | 680410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | **1121066** | 1165401 |
| **Impairment of long-lived assets** | **—** | (3736) |
| **Operating income** | **463773** | 375028 |
| **OTHER EXPENSES AND (INCOME), NET** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | **87131** | 63780 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | **(8646)** | (7764) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on extinguishment of debt | **331** | (4416) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other losses (gains), net | **1641** | (10649) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in net gain of affiliates | **(12329)** | (2879) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses and (income), net** | **68128** | 38072 |
| **Income before income taxes** | **395645** | 336956 |
| **Income tax expense** | **95980** | 78449 |
| **Net income** | $**299665** | $258507 |

---

*Results of Operations*

For the year ended December 31, 2024, the Company recognized income before income taxes of $395.6 million, which is a $58.7 million increase from the year ended December 31, 2023. The increase in income before income taxes was primarily due to an $88.7 million increase in operating income and a $9.5 million increase in the equity in net gain of affiliates, both of which were partially offset by a $23.4 million increase in interest expense, a $12.3 million decrease in other losses (gains), net, and a $4.7 million decrease in loss (gain) on extinguishment of debt.

Operating income increased $88.7 million primarily due to a $17.6 million increase in franchise and management fees, a $7.7 million increase in partnership services and fees, a $9.0 million increase in other revenues, a $14.7 million decrease in the net reimbursable deficit from franchised and managed properties, and a $38.5 million decrease in business combination, diligence and transition costs.

The primary reasons for these fluctuations are described in more detail below.

*Franchise and Management Fees*

Franchise and management fees increased $17.6 million primarily due to a $14.7 million increase in revenues generated from programs, platforms, and services associated with the Company's franchise operations and a $0.9 million increase in international royalty fees, all of which were partially offset by a $3.4 million decrease in U.S. royalty fees.

U.S. royalty fees decreased $3.4 million to $454.7 million for the year ended December 31, 2024 from $458.1 million for the year ended December 31, 2023. The decrease in U.S. royalty fees was primarily due to a 1.2% decrease in U.S. system-wide RevPAR as a result of a 0.3% decrease in average daily rates and a 50 basis points decrease in occupancy, all of which were

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partially offset by a 3.0% increase in open and operating U.S. hotel rooms and a system-wide 7 basis points increase in the average royalty rate from 4.99% for the year ended December 31, 2023 to 5.06% for the year ended December 31, 2024.

A summary of the operating performance for the Company's U.S. franchised hotels, organized by chain scale, was as follows:

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2024** | **2024** | **2024** | **2023** | **2023** | **2023** | **Change** | **Change** | **Change** | **Change** |
| | **Average Daily Rate** | **Occupancy** | **RevPAR** | **Average<br>Daily Rate** | **Occupancy** | **RevPAR** | **Average<br>Daily Rate** | **Occupancy** | **Occupancy** | **RevPAR** |
| **Upscale & Above** <sup>(1)</sup>  | $**151.91** | **57.7%** | $**87.67** | $151.19 | 56.6% | $85.65 | 0.5% | 110 | bps | 2.4% |
| **Midscale & Upper Midscale** <sup>(2)</sup> | **100.95** | **55.9%** | **56.45** | 101.12 | 56.8% | 57.43 | (0.2)% | (90) | bps | (1.7)% |
| **Extended Stay** <sup>(3)</sup> | **64.13** | **71.2%** | **45.66** | 63.50 | 72.3% | 45.88 | 1.0% | (110) | bps | (0.5)% |
| **Economy** <sup>(4)</sup> | **72.18** | **47.1%** | **34.00** | 71.66 | 47.9% | 34.36 | 0.7% | (80) | bps | (1.0)% |
| **Total** | $**96.67** | **56.4%** | $**54.54** | $96.92 | 56.9% | $55.19 | (0.3)% | (50) | bps | (1.2)% |

---

(1) Includes Ascend Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.

(2) Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands.

(3) Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands.

(4) Includes Econo Lodge and Rodeway brands.

A summary of the U.S. hotels and rooms by brand in our franchise system as of December 31, 2024 and 2023 was as follows:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** | **Variance** | **Variance** | **Variance** | **Variance** |
| | **Hotels** | **Rooms** | **Hotels** | **Rooms** | **Hotels** | **%** | **Rooms** | **%** |
| **Comfort** <sup>(1)</sup> | **1674** | **131495** | 1675 | 131637 | (1) | (0.1)% | (142) | (0.1)% |
| **Quality Inn** | **1627** | **118725** | 1620 | 119153 | 7 | 0.4% | (428) | (0.4)% |
| **Econo Lodge** | **642** | **37528** | 675 | 39805 | (33) | (4.9)% | (2277) | (5.7)% |
| **Rodeway** | **447** | **24948** | 470 | 26309 | (23) | (4.9)% | (1361) | (5.2)% |
| **Country** | **422** | **33771** | 428 | 34122 | (6) | (1.4)% | (351) | (1.0)% |
| **Sleep Inn** | **415** | **29118** | 432 | 30411 | (17) | (3.9)% | (1293) | (4.3)% |
| **Ascend Collection** | **233** | **38589** | 209 | 23484 | 24 | 11.5% | 15105 | 64.3% |
| **WoodSpring Suites** | **256** | **30846** | 235 | 28350 | 21 | 8.9% | 2496 | 8.8% |
| **Clarion** <sup>(2)</sup> | **193** | **19944** | 186 | 19813 | 7 | 3.8% | 131 | 0.7% |
| **MainStay Suites** | **141** | **10157** | 127 | 8863 | 14 | 11.0% | 1294 | 14.6% |
| **Suburban Studios** | **111** | **9159** | 105 | 9112 | 6 | 5.7% | 47 | 0.5% |
| **Cambria Hotels** | **76** | **10344** | 74 | 10239 | 2 | 2.7% | 105 | 1.0% |
| **Radisson** <sup>(3)</sup> | **57** | **13390** | 64 | 15206 | (7) | (10.9)% | (1816) | (11.9)% |
| **Park Inn** | **27** | **2926** | 4 | 363 | 23 | 575.0% | 2563 | 706.1% |
| **Everhome Suites** | **7** | **799** | 1 | 98 | 6 | 600.0% | 701 | 715.3% |
| **Total U.S. Franchises** | **6328** | **511739** | 6305 | 496965 | 23 | 0.4% | 14774 | 3.0% |

---

(1)Includes the Comfort family of brand extensions, including Comfort Inn and Comfort Suites.

(2)Includes the Clarion family of brand extensions, including Clarion and Clarion Pointe.

(3)Includes the Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.

International royalty fees increased $0.9 million to $29.8 million for the year ended December 31, 2024 from $28.9 million for the year ended December 31, 2023. The increase in international royalty fees was primarily due to an increase in the size of the international franchise system by 36 hotels (from 1,222 hotels as of December 31, 2023 to 1,258 hotels as of December 31, 2024) and 6,050 rooms (from 136,021 rooms as of December 31, 2023 to 142,071 rooms as of December 31, 2024), and an increase in international RevPAR.

*Partnership Services and Fees*

Partnership services and fees increased $7.7 million primarily due to an increase in the fees generated from the Company's co-branded credit card agreement and qualified vendors.

*Owned Hotels*

The Company's revenues, net of operating expenses, from the owned hotels increased $4.1 million primarily due to the improved operating performance at our owned hotels and the addition of two owned hotels during the year ended December 31, 2024 as compared to the prior year.

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*Other Revenues*

Other revenues increased $9.0 million primarily due to an increase in liquidated damages that resulted from the early termination of franchise agreements and other franchising revenues.

*Business Combination, Diligence and Transition Costs*

Business combination, diligence and transition costs decreased $38.5 million primarily due to the termination of the Wyndham acquisition pursuit on March 8, 2024 and substantial completion of the integration of the Radisson Hotels Americas business in the fourth quarter of 2023.

*Impairment of Long-Lived Assets*

Impairment of long-lived assets decreased $3.7 million primarily due to a sublease agreement that was signed for the legacy Radisson corporate office space in Minneapolis, Minnesota. The long-lived asset group associated with the office space was determined to be impaired due to the carrying value exceeding its fair value, which resulted in the recognition of a $3.4 million impairment loss in 2023. The Company did not recognize any impairments of long-lived assets during the year ended December 31, 2024.

*Interest Expense*

Interest expense increased $23.4 million primarily due to increased borrowings and higher interest rates on the Company's outstanding borrowings. Refer to the discussion in the Liquidity and Capital Resources section in MD&A for more information.

*Loss (Gain) on Extinguishment of Debt*

Loss (gain) on extinguishment of debt decreased $4.7 million. During the year ended December 31, 2024, the Company recognized a loss on extinguishment of debt due to the repayment of the 2023 Term Loan. During the year ended December 31, 2023, the Company derecognized certain economic development loans from the consolidated balance sheets due to satisfying the relevant performance conditions in the loan agreement, resulting in a gain on extinguishment of debt.

*Other Losses (Gains), net*

Other losses (gains), net decreased $12.3 million primarily due to a net loss of $8.3 million on the sales of equity securities related to the pursuit of the Wyndham acquisition during the year ended December 31, 2024 and a $4.0 million unrealized gain on investments in equity securities during the year ended December 31, 2023, all of which were partially offset by dividend income of $1.5 million that was recognized during the year ended December 31, 2024 and a $0.6 million increase in the Company's deferred compensation and employee benefit plans assets based on increases in the fair value of the underlying investments.

*Equity in Net Gain of Affiliates*

Equity in net gain of affiliates increased $9.5 million primarily due to a distribution from an unconsolidated affiliate, which sold its underlying assets, resulting in the recognition of a $7.2 million gain during the year ended December 31, 2024. Refer to Note 7 to our consolidated financial statements for additional information.

*Income Tax Expense*

The Company's effective income tax rates were 24.3% and 23.3% for the years ended December 31, 2024 and 2023, respectively. The effective income tax rates for the years ended December 31, 2024 and 2023 were higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes and tax expense related to compensation, which were partially offset by federal income tax credits.

**Liquidity and Capital Resources**

Our Company historically generates strong and predictable operating cash flows primarily from our hotel franchising operations. Our capital allocation decisions, including capital structure and our uses of capital, are intended to maximize our return on invested capital and create value for our shareholders, while maintaining a strong balance sheet and financial flexibility. The Company's short-term and long-term liquidity requirements primarily arise from working capital needs, debt obligations, income tax payments, dividend payments, share repurchases, capital expenditures, and investments in growth opportunities.

As of December 31, 2025, the Company's primary sources of liquidity consisted of $571.4 million in cash and cash equivalents and available borrowing capacity under the senior unsecured revolving credit facility. As of December 31, 2025, the Company was in compliance with all of its financial covenants under its credit agreements and the Company expects to remain in such

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compliance. The Company believes that its cash on hand, available borrowing capacity under the senior unsecured revolving credit facility, cash flows from operations, and access to additional capital in the debt markets will provide sufficient liquidity to meet the expected future operating, investing, and financing needs of the business.

Our board of directors authorized a program which permits us to offer investment and guaranty support to qualified franchisees, and to acquire or develop and then resell hotels to incentivize franchise development of our brands in strategic markets. We primarily engage in these investment and guaranty support activities to encourage acceleration of the growth of our Cambria Hotels and Everhome Suites brands. With respect to these activities, the Company had approximately $667.2 million of investments in the Cambria Hotels and Everhome Suites brands reflected in the consolidated balance sheet as of December 31, 2025. The Company is generally targeting to recycle these investments within a five year period, and expects our outstanding investments to not exceed $1.2 billion at any point in time based on the current board of directors' authorization. The deployment and annual pace of future investment and guaranty support activities will depend upon market and other conditions, including among others, our franchise sales results, the environment for new construction hotel development, and the hotel lending environment.

The Company also strategically deploys capital in the form of franchise agreement acquisition costs across our brands to incentivize franchise development. The timing and the amount of the franchise agreement acquisition cost payments are dependent on various factors including the implementation of various development and brand incentive programs, the level of franchise sales, and the ability of our franchisees to complete construction or convert their hotels to one of the Company's brands.

The Company has historically generated cash flows from operating activities that are in excess of the capital needed to invest in growth opportunities and to service debt obligations. As a result, the Company maintains a share repurchase program and typically pays a quarterly dividend. On March 11, 2024, the Company's board of directors approved an increase of 5 million shares in the number of shares authorized to be repurchased under its share repurchase program. As of December 31, 2025, the Company had 2.8 million shares remaining under the current share repurchase authorization. The 2025 annual dividend rate was $1.15 per share or approximately $53.5 million in aggregate dividend payments. Future dividends are subject to declarations by our board of directors.

*Cash Flows from Operating Activities*

During the years ended December 31, 2025, 2024, and 2023, the net cash provided by operating activities was $270.4 million, $319.4 million, and $296.6 million, respectively. Our operating cash flows decreased $49.0 million during the year ended December 31, 2025 primarily due to the timing of working capital items, the final installment payment made in 2025 for the one-time transition tax on earnings of foreign subsidiaries that was imposed by 2017 tax legislation, and the cash paid for the purchase of transferrable tax credits in 2025 of which a portion will be utilized in 2026, all of which were partially offset by a decrease in business combination, diligence and transition costs associated with the timing of the termination of the Wyndham acquisition pursuit during the first quarter of 2024, a decrease in deferred income taxes primarily attributable to the enactment of a tax act, and a decrease in the franchise agreement acquisition cost payments.

In conjunction with brand and development programs, we strategically make certain franchise agreement acquisition cost payments to franchisees as an incentive to enter into new franchise agreements or perform-designated improvements to properties under existing franchise agreements. If the franchisee remains in the franchise system in good standing over the term specified in the incentive agreement, then the Company forgives the incentive ratably. If the franchisee exits our franchise system or is not operating their franchise in accordance with our quality or credit standards and is terminated, then the franchisee must repay the unamortized franchise agreement acquisition cost payment plus interest to the Company. During the years ended December 31, 2025, 2024, and 2023, the Company's net franchise agreement acquisition costs were $83.4 million, $112.2 million, and $98.3 million, respectively.

The Company's franchise agreements require the payment of marketing and reservation fees to be used by the Company for the expenses associated with providing franchise services such as national marketing, media advertising, and central reservation systems. Additionally, the Company's management agreements include cost reimbursements, primarily related to the payroll costs at the managed hotels where the Company is the employer. These activities are reflected in revenue for reimbursable costs from franchised and managed properties and reimbursable expenses from franchised and managed properties. During the years ended December 31, 2025, 2024, and 2023, reimbursable expenses from franchised and managed properties exceeded revenue for reimbursable costs from franchised and managed properties by $47.1 million, $18.2 million, and $32.8 million, respectively.

*Cash Flows from Investing Activities*

The net cash used in investing activities was $218.3 million, $84.6 million, and $265.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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During the years ended December 31, 2025, 2024, and 2023, investments in owned hotel properties totaled $106.9 million, $106.8 million, and $68.6 million, respectively. These investments related to the ongoing hotel development efforts to support the continued growth of the Cambria Hotels and Everhome Suites brands. During the years ended December 31, 2025, 2024, and 2023, investments in other property and equipment totaled $38.9 million, $39.1 million, and $47.7 million, respectively. These investments primarily related to leasehold improvements, office equipment, and capitalized software.

The Company has equity method investments in affiliates related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels and Everhome Suites branded-hotels in strategic markets. During the years ended December 31, 2025, 2024, and 2023, the Company invested $93.7 million, $52.8 million, and $38.9 million, respectively, to support these efforts. During the years ended December 31, 2025, 2024, and 2023, the Company received distributions from these affiliates totaling $44.6 million, $15.9 million, and $0.9 million, respectively. For the year ended December 31, 2025, the Company received net cash proceeds of $52.0 million from the sale of four wholly-owned Everhome Suites under construction to a joint venture. Refer to Note 7 for more information.

The Company provides financing to franchisees for hotel development efforts and other purposes in the form of notes receivable loans. The loans bear interest and are expected to be repaid in accordance with the terms of the loan agreements. During the years ended December 31, 2025, 2024, and 2023, the Company issued a total of $6.9 million, $38.0 million, and $4.3 million of notes receivable loans, respectively, and received repayments totaling $7.4 million, $32.1 million, and $10.9 million on the notes receivable loans, respectively.

On July 2, 2025, the Company acquired the remaining 50% of the outstanding shares of Choice Hotels Canada for a purchase price, net of the cash acquired, of $73.4 million. The acquisition was funded with available cash and borrowings under the Company's senior unsecured revolving credit facility.

During the year ended December 31, 2025, there were no purchases or sales of equity securities. During the year ended December 31, 2024, the Company purchased no equity securities and received $108.1 million in proceeds from the sales of equity securities. During the year ended December 31, 2023, the Company purchased $112.4 million of equity securities in conjunction with the Wyndham acquisition pursuit and there were no sales of equity securities.

*Cash Flows from Financing Activities*

Cash flows from financing activities primarily relate to the proceeds or payments on the Company's borrowings, treasury stock repurchases, acquisition of shares in connection with the exercise or vesting of equity awards, the payment of dividends, and the payment of debt issuance costs.

<u>Debt</u>

*Senior Unsecured Revolving Credit Facility*

On June 28, 2024, the Company entered into a Second Amended and Restated Senior Unsecured Credit Agreement (the "Restated Credit Agreement"), which amended and restated the Company's existing amended and restated senior unsecured credit agreement dated August 20, 2018 (the "Former Credit Agreement"). The Former Credit Agreement provided for an $850 million unsecured revolving credit facility (the "Revolver") with a final maturity date of August 20, 2026. The Restated Credit Agreement increased the commitments under the Revolver to $1 billion and extended the final maturity date of the Revolver to June 28, 2029, subject to optional one-year extensions that can be requested by the Company prior to each of the third, fourth, and fifth anniversaries of the closing date of the Restated Credit Agreement.

The effectiveness of such extension is subject to the consent of the lenders under the Restated Credit Agreement and certain customary conditions. The Restated Credit Agreement also provides that up to $50 million of borrowings under the Revolver may be used for alternative currency loans, up to $10 million of capacity under the Revolver may be used for the issuance of letters of credit, and up to $25 million of borrowings under the Revolver may be used for swingline loans. The Company may from time to time designate one or more wholly-owned subsidiaries of the Company as additional borrowers under the Restated Credit Agreement, subject to the consent of the lenders and certain customary conditions.

At any time prior to the final maturity date, the Company may increase the amount of the Revolver or add one or more term loan facilities under the Restated Credit Agreement by up to an additional $500 million in the aggregate to the extent that any one or more lenders commit to being a lender for the additional amount of such increase or the term loan facility and certain other customary conditions are met.

The Restated Credit Agreement allows the Company to elect to have the Revolver bear interest at a rate equal to (i) the secured overnight financing rate (subject to a credit spread adjustment of 0.10% and a 0.00% floor) plus a margin ranging from 0.90% to 1.50% or (ii) a base rate plus a margin ranging from 0.00% to 0.50%. In each case, the margin is determined according to the

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Company's senior unsecured long-term debt rating or under circumstances as set forth in the Restated Credit Agreement if the Company's total leverage ratio is less than 2.5 to 1.0.

The Restated Credit Agreement requires the Company to pay a fee on the total commitments under the Revolver, calculated on the basis of the actual daily amount of the commitments under the Revolver (regardless of usage) times a percentage per annum ranging from 0.075% to 0.25% (depending on the Company's senior unsecured long-term debt rating or under specific circumstances as set forth in the Restated Credit Agreement if the Company's total leverage ratio is less than 2.5 to 1.0).

The Restated Credit Agreement requires that the Company and its restricted subsidiaries comply with various covenants, including with respect to restrictions on liens, incurring indebtedness, making dividends and stock repurchases, making investments and effecting mergers and/or asset sales. The Restated Credit Agreement imposes financial maintenance covenants requiring the Company to maintain a consolidated fixed charge coverage ratio of at least 2.5 to 1.0 and a total leverage ratio of not more than 4.5 to 1.0, which may be increased up to two nonconsecutive occasions to 5.5 to 1.0 for up to four consecutive fiscal quarters commencing with the fiscal quarter in which certain material acquisitions are consummated. So long as the Company maintains an Investment Grade Rating, as defined in the Restated Credit Agreement, then the Company will not need to comply with the consolidated fixed charge coverage ratio covenant.

The Restated Credit Agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the Restated Credit Agreement to be immediately due and payable. As of December 31, 2025, the Company maintained a total leverage ratio of 2.86x, including outstanding debt of approximately $469.8 million on the senior unsecured revolving credit facility. The Company was in compliance with all financial covenants under the Restated Credit Agreement.

Debt issuance costs incurred in connection with the Restated Credit Agreement are amortized on a straight-line basis, which is not materially different from the effective interest method, through the loan's maturity date. The amortization of the debt issuance costs is included in interest expense in the consolidated statements of income.

The proceeds of the Restated Credit Agreement are expected to be used for general corporate purposes, including working capital, debt repayment, stock repurchases, dividends, investments, and other permitted uses as set forth in the Restated Credit Agreement.

*2024 Senior Unsecured Notes Due 2034*

On July 2, 2024, the Company issued unsecured senior notes with a principal amount of $600 million (the "2024 Senior Notes") at a discount of $6.4 million, bearing a coupon of 5.85%, with an effective rate of 6.11%, and mature on August 1, 2034. Interest on the 2024 Senior Notes is payable semi-annually on February 1<sup>st</sup> and August 1<sup>st</sup> of each year, commencing on February 1, 2025. The interest rate payable on the 2024 Senior Notes will be subject to adjustment based on certain rating events.

The Company may redeem the 2024 Senior Notes, in whole or in part, at any time prior to their maturity at the redemption price, which includes a make-whole premium. If the 2024 Senior Notes are redeemed on or after May 1, 2034 (three months prior to the applicable maturity date), then the redemption price will be equal to 100% of the principal amount of the 2024 Senior Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. Additionally, at the option of the holders of the 2024 Senior Notes, the Company may be required to repurchase all or a portion of the holder's 2024 Senior Notes upon the occurrence of a change of control event, at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest, to the date of repurchase.

*2023 Term Loan Due 2024* 

On December 18, 2023, the Company entered into a $500 million unsecured term loan with an effective interest rate of 6.83% and a maturity date of December 16, 2024 (the "2023 Term Loan"). The 2023 Term Loan and all accrued but unpaid interest must be repaid in full on the maturity date.

The term loan agreement required that the Company comply with various covenants, including restrictions on liens, incurring indebtedness, making dividends, stock repurchases, investments, and completing mergers and/or asset sales. The term loan agreement had financial covenants which required the Company to maintain a consolidated fixed charge coverage ratio of at least 2.5 to 1.0, and a total leverage ratio of not more than 4.5 to 1.0 which may have been increased to 5.5 to 1.0 for up to three consecutive fiscal quarters commencing with the fiscal quarter in which certain material acquisitions are consummated. As long as the Company maintained an Investment Grade Rating, as defined in the term loan agreement, then the Company would not need to comply with the consolidated fixed charge coverage ratio covenant. The Company was in compliance with all covenants upon the repayment in full of the 2023 Term Loan.

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On July 2, 2024, the Company used a portion of the net proceeds from the sale of the 2024 Senior Notes, after deducting underwriting discounts and commissions and other offering expenses, to repay in full the 2023 Term Loan.

*2020 Senior Unsecured Notes Due 2031*

On July 23, 2020, the Company issued unsecured senior notes with a principal amount of $450 million (the "2020 Senior Notes") bearing a coupon of 3.70%. The 2020 Senior Notes will mature on January 15, 2031, with interest to be paid semi-annually on January 15<sup>th</sup> and July 15<sup>th</sup> of each year. The Company used the net proceeds of the 2020 Senior Notes, after deducting underwriting discounts, commissions, and offering expenses, to repay in full the $250 million term loan entered in April 2020 and to fund the purchase price of the 2012 Senior Notes.

The interest rate payable on the 2020 Senior Notes is subject to adjustment based on certain rating events. The Company may redeem the 2020 Senior Notes, in whole or in part, at its option at the applicable redemption price before the maturity date. If the Company redeems the 2020 Senior Notes prior to October 15, 2030 (three months prior to the maturity date) (the "2020 Notes Par Call Date"), the redemption price will be equal to the greater of (a) 100% of the principal amount of the notes to be redeemed, or (b) the sum of the present values of the remaining scheduled principal and interest payments that would have been payable had the 2020 Senior Notes matured on the 2020 Notes Par Call Date, discounted to the redemption date on a semi-annual basis at the applicable Treasury Rate plus 50 basis points, plus accrued and unpaid interest. If the Company redeems the 2020 Senior Notes on or after the 2020 Notes Par Call Date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. Additionally, at the option of the holders of the 2020 Senior Notes, the Company may be required to repurchase all or a portion of the 2020 Senior Notes upon the occurrence of a change of control event at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest, to the date of repurchase.

*2019 Senior Unsecured Notes Due 2029*

On November 27, 2019, the Company issued unsecured senior notes with a principal amount of $400 million (the "2019 Senior Notes") at a discount of $2.4 million, bearing a coupon of 3.70% with an effective rate of 3.88%. The 2019 Senior Notes will mature on December 1, 2029, with interest to be paid semi-annually on December 1<sup>st</sup> and June 1<sup>st</sup> of each year. The Company used the net proceeds of this offering, after deducting underwriting discounts, commissions, and offering expenses, to repay the previously outstanding senior notes with a principal amount of $250 million due August 28, 2020, and for working capital and other general corporate purposes.

The Company may redeem the 2019 Senior Notes, in whole or in part, at its option at the applicable redemption price before maturity. If the Company redeems the 2019 Senior Notes prior to September 1, 2029 (three months prior to the maturity date) (the "2019 Notes Par Call Date"), the redemption price will be equal to the greater of (a) 100% of the principal amount of the notes to be redeemed, or (b) the sum of the present values of the remaining scheduled principal and interest payments that would have been payable had the 2019 Senior Notes matured on the 2019 Notes Par Call Date, discounted to the redemption date on a semi-annual basis at the applicable Treasury Rate plus 30 basis points, plus accrued and unpaid interest. If the Company redeems the 2019 Senior Notes on or after the 2019 Notes Par Call Date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. Additionally, at the option of the holders of the 2019 Senior Notes, the Company may be required to repurchase all or a portion of the 2019 Senior Notes upon the occurrence of a change of control event at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest, to the date of repurchase.

*2025 Economic Development Loans*

The Company entered into certain economic development agreements with various governmental entities in conjunction with the relocation of its corporate headquarters in November 2023. In accordance with these agreements, as December 31, 2025, the governmental entities advanced $1.9 million to the Company to offset a portion of the corporate headquarters relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees within the jurisdictions. The Company has been advanced the full amounts that were due pursuant to these agreements, and these advances bear interest at a rate of 3% per annum.

Repayment of the advances is contingent upon the Company achieving certain performance conditions, which are measured annually on December 31st and primarily relate to maintaining certain levels of employment within the various jurisdictions. If the Company fails to meet an annual performance condition, then the Company may be required to repay a portion or all of the advances including accrued interest by April 1st following the measurement date. Any outstanding advances at the expiration of the Company's corporate headquarters lease in 2035 will be forgiven in full. The advances are presented in debt in the Company's consolidated balance sheets until the Company determines that the future performance conditions have been met over the entire term of the agreement and the Company will not be required to repay the advances. The Company accrues

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interest on the portion of the advances that it expects to repay. The Company is in compliance with all applicable current performance conditions as of December 31, 2025.

*2013 Economic Development Loans*

The Company entered into economic development agreements with various governmental entities in conjunction with the relocation of its corporate headquarters in April 2013. In accordance with these agreements, the governmental entities agreed to advance approximately $4.4 million to the Company to offset a portion of the corporate headquarters relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees within the jurisdictions. The Company has been advanced the full amounts that were due pursuant to these agreements, and these advances bore interest at a rate of 3% per annum.

Repayment of the advances was contingent upon the Company achieving certain performance conditions. The performance conditions were measured annually on December 31st and primarily related to maintaining certain levels of employment within the various jurisdictions. If the Company failed to meet an annual performance condition, then the Company may have been required to repay a portion, or all, of the advances including accrued interest by April 30th following the measurement date. Under the terms of the agreement, upon the expiration of the Company's previous ten-year corporate headquarters lease agreement in 2023, any outstanding advances would be forgiven in full. The $4.4 million of advances were previously recognized as debt in the consolidated balance sheets.

Upon the expiration of the Company's previous corporate headquarters lease agreement in 2023, the Company concluded that it had achieved the performance conditions over the entire term of the agreement and therefore, the Company was not required to repay the advances. As a result, during the year ended December 31, 2023, the Company derecognized the $4.4 million economic development loans debt from the consolidated balance sheets and recognized a gain on extinguishment of debt in the consolidated statements of income.

<u>Dividends</u>

During the year ended December 31, 2025, the Company declared aggregate annual cash dividends of $1.15 per share or approximately $53.5 million in aggregate dividend payments.

We expect that cash dividends will continue to be paid in the future, subject to the declaration by our board of directors, future business performance, economic conditions, changes in tax regulations, and other matters. In accordance with the Restated Credit Agreement, the Company may not declare or make any dividend payments if there is an existing event of default or if the dividend payment would create an event of default.

<u>Share Repurchases & Redemptions</u>

The Company has a share repurchase program. Treasury stock activity is recorded at cost in the consolidated balance sheets. During the year ended December 31, 2025, the Company repurchased 1.0 million shares of its common stock under the share repurchase program at a total cost, including accrued excise tax, of $125.9 million. As of December 31, 2025, the Company had 2.8 million shares remaining under the current share repurchase authorization.

During the year ended December 31, 2025, the Company redeemed 0.1 million shares of common stock at a total cost of $9.9 million from employees to satisfy the option exercise price and the statutory minimum tax-withholding requirements related to the exercising of stock options and the vesting of performance vested restricted stock units ("PVRSUs") and restricted stock grants. These redemptions were outside the share repurchase program. During the year ended December 31, 2025, the Company received proceeds of $6.8 million from stock options exercised by employees.

The Company has material future contractual obligations of $104.2 million (excluding the previously addressed debt obligations, the financing, investment, guaranty, and franchise agreement acquisition cost commitments to franchisees, and the deferred compensation plan liabilities) as of December 31, 2025.

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**Critical Accounting Estimates**

The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods, and the related disclosures in the consolidated financial statements and the accompanying footnotes. On an ongoing basis, we evaluate these estimates and judgments based on historical experiences and various other factors that we believe reflect the current circumstances. While we believe our estimates, assumptions, and judgments are reasonable, they are based on information that was available when the estimate or assumption was made. Actual results may differ significantly from these estimates due to changes in assumptions, judgments, and conditions as a result of unforeseen events or otherwise, which could have a material effect on our financial condition or results of operations.

We believe that the following estimates, which are used in conjunction with our significant accounting policies, are critical because they involve a higher degree of judgment and are based on information that is inherently uncertain. Refer to Note 1 to our consolidated financial statements for information on our significant accounting policies.

*Guest Loyalty Program*

Choice Privileges is the Company's guest loyalty program, which enables members to earn points based on their spending levels with the Company's franchisees. The points, which the Company accumulates and tracks on the members' behalf, may be redeemed for free accommodations or other benefits (e.g., gift cards to participating retailers). The Company collects from franchisees a percentage of the loyalty program members' gross room revenue from completed hotel stays to operate the guest loyalty program. At the time the points are redeemed for free accommodations or other benefits, the Company reimburses the franchisees or third parties based on a rate derived in accordance with the franchise or vendor agreement.

Loyalty program points represent a performance obligation attributable to the usage of the points, and thus the revenues are recognized at a point in time when the loyalty program points are redeemed by the members for benefits. The transaction price is variable and determined in the period when the loyalty program points are earned and the underlying gross room revenues are known. No loyalty program revenues are recognized at the time the loyalty program points are issued.

The Company is an agent in coordinating the delivery of the services between the loyalty program member and the franchisee or third party, and as a result, the revenues are recognized net of the cost of redemptions. The estimated value of the future redemptions is reflected in the current and non-current liability for guest loyalty program in the consolidated balance sheets. The liability for the guest loyalty program is developed based on an estimate of the eventual redemption rates and point values using various actuarial methods. These significant judgments determine the required point liability attributable to the outstanding points, which is relieved as the redemption costs are processed. The amount of the loyalty program fees in excess of the guest loyalty program point liability represents current and non-current deferred revenue, which is recognized to revenue as the points are redeemed including an estimate of the future forfeitures ("breakage"). The anticipated redemption pattern of the points is the basis for the current and non-current designation of each liability. The loyalty program point redemption revenues are presented within revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income. Any changes in the estimates used in developing the breakage rate or other future guest loyalty program operations could result in a material change to the liability for the guest loyalty program and the deferred revenues.

The Company maintains various agreements with third-party partners, including the co-branding of the Choice Privileges credit card. The agreements typically provide for use of the Company's marks, limited access to the Company's distribution channels, and the sale of Choice Privileges points, in exchange for the payment of fees which primarily comprises variable consideration each month. Choice Privileges members can earn points through participation in the third-party partner's program. The partner agreements include multiple performance obligations. The primary performance obligations are brand intellectual property and material rights for free or discounted goods or services to the hotel guests. The allocation of fixed and variable consideration to the performance obligations is based on the standalone selling price, which is estimated based on the market and income methods which contain significant judgments. The amounts allocated to the brand intellectual property are recognized on a gross basis over time using the output measure of time elapsed, and are presented within partnership services and fees in the consolidated statements of income. The amounts allocated to material rights for free or discounted goods or services to hotel guests are recognized to revenue as the points are redeemed including an estimate of breakage, within revenue for reimbursable costs from franchised and managed properties.

*Goodwill and Intangible Assets*

The Company evaluates the impairment of goodwill and intangible assets with indefinite lives annually as of October 1st or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization that indicate that the Company may not be able to recover the carrying amount of the asset. During the year ended December 31, 2025, the Company changed its annual impairment assessment date from December

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31st to October 1st. In evaluating these assets for impairment, the Company may elect to first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit or the indefinite-lived intangible asset is less than its carrying amount. If the conclusion is that it is not more likely than not that the fair value of the asset is less than its carrying value, then no further testing is required. If the conclusion is that it is more likely than not that the fair value of the asset is less than its carrying value, then a quantitative impairment test is performed whereby the carrying value is compared to the fair value of the asset and an impairment charge is recognized, as applicable, for the excess of the carrying value over the fair value. The Company may elect to forgo the qualitative assessment and move directly to the quantitative impairment tests for goodwill and indefinite-lived intangible assets. The Company determines the fair value of its reporting units and indefinite-lived intangible assets using the income and market methods.

Goodwill is allocated to the Company's reporting units. The Company's reporting units are determined primarily by the availability of discrete financial information relied upon by the chief operating decision maker ("CODM") to assess performance and make operating segment resource allocation decisions. As of December 31, 2025, the Company's goodwill is allocated to the Hotel Franchising reporting unit. The Company performed a qualitative impairment analysis for the Hotel Franchising reporting unit and concluded that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. As such, no impairment was recognized and a quantitative test was not required.

**New Accounting Standards**

Refer to the "Recently Adopted & Issued Accounting Standards" section of Note 1 to the consolidated financial statements for information related to our adoption and assessment of new accounting standards.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

The Company is exposed to market risk from changes in interest rates and the impact of fluctuations in foreign currencies on the Company's foreign investments and operations. The Company manages its exposure to these market risks through the monitoring of its available financing alternatives, including in certain circumstances, the use of derivative financial instruments. We are also subject to risk from changes in debt and equity prices from our non-qualified retirement savings plan investments in debt securities and common stock, which have a carrying value of $52.0 million as of December 31, 2025, and are accounted for as trading securities. The Company will continue to monitor the exposure in these areas and make the appropriate adjustments as market conditions dictate.

As of December 31, 2025, the Company had $472.6 million of variable interest rate debt instruments outstanding at an effective interest rate of 5.22%. A hypothetical change of 10% in the Company's effective interest rate from the December 31, 2025 levels would increase or decrease annual interest expense by $2.5 million. The Company expects to refinance its fixed and variable long-term debt obligations prior to their scheduled maturities.

The Company does not currently have any material derivative financial instruments.

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**Item 8. Financial Statements and Supplementary Data**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

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| | |
|:---|:---|
| | **Page No.** |
| <u>[Report of Independent Registered Public Accounting Firm (PCAOB ID:](#i3b6e36adc65c4bfb8037f9d58cf59e61_112)42</u>) | <u>[54](#i3b6e36adc65c4bfb8037f9d58cf59e61_112)</u> |
| <u>[Consolidated Statements of Income](#i3b6e36adc65c4bfb8037f9d58cf59e61_118)</u> | <u>[56](#i3b6e36adc65c4bfb8037f9d58cf59e61_118)</u> |
| <u>[Consolidated Statements of Comprehensive Income](#i3b6e36adc65c4bfb8037f9d58cf59e61_121)</u> | <u>[57](#i3b6e36adc65c4bfb8037f9d58cf59e61_121)</u> |
| <u>[Consolidated Balance Sheets](#i3b6e36adc65c4bfb8037f9d58cf59e61_124)</u> | <u>[58](#i3b6e36adc65c4bfb8037f9d58cf59e61_124)</u> |
| <u>[Consolidated Statements of Cash Flows](#i3b6e36adc65c4bfb8037f9d58cf59e61_127)</u> | <u>[59](#i3b6e36adc65c4bfb8037f9d58cf59e61_127)</u> |
| <u>[Consolidated Statements of Shareholders' Equity (Deficit)](#i3b6e36adc65c4bfb8037f9d58cf59e61_130)</u> | <u>[61](#i3b6e36adc65c4bfb8037f9d58cf59e61_130)</u> |
| <u>[Notes to Consolidated Financial Statements](#i3b6e36adc65c4bfb8037f9d58cf59e61_133)</u> | <u>[62](#i3b6e36adc65c4bfb8037f9d58cf59e61_133)</u> |

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**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Choice Hotels International, Inc.

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated balance sheets of Choice Hotels International, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 19, 2026 expressed an unqualified opinion thereon.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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| | ***Accounting for Choice Privileges Loyalty Program*** |
| *Description of the Matter* | The Company recognized $125.6 million in revenues from loyalty points redeemed, net of the cost of redemptions, and had a point liability and deferred revenue of $124.8 million and $114.9 million, respectively, as of December 31, 2025, associated with the Choice Privileges Loyalty Program. <br>As discussed in Note 1 to the consolidated financial statements, loyalty points earned represent a performance obligation attributable to usage of the points, and thus revenues are recognized at the point in time when the loyalty points are redeemed by members for benefits. The liability for the Choice Privileges Loyalty Program is developed based on an estimate of the eventual redemption rates on future redemption behavior using various actuarial methods and point values. The amount of the Choice Privileges Loyalty Program fees in excess of the point liability represents deferred revenue, which is recognized to revenue as points are redeemed including an estimate of future forfeitures.<br>Auditing the Choice Privileges Loyalty Program results is complex due to: (1) the complexity of the models used and the high volume of data to monitor and account for Choice Privileges Loyalty Program results; and (2) the complexity of estimating the future redemption rate. Performing audit procedures to evaluate the reasonableness of these estimates requires a high degree of auditor judgment and an increased extent of effort, which includes the use of actuarial specialists. |

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| *How We Addressed the Matter in Our Audit* | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's process of accounting for the Choice Privileges Loyalty Program during the year. For example, we tested controls over management's review of the assumptions and data inputs used in the accounting model and the actuarial methods used to estimate the ultimate redemption rate of Choice Privileges Loyalty Program points.<br>To test the recognition of revenues and liabilities associated with the Choice Privileges Loyalty Program, we performed audit procedures that included, among others, testing the completeness and accuracy of the data and significant assumptions used in the models and assessing the accounting models developed by the Company to recognize the related revenue and the liabilities. For example, we tested significant inputs into the accounting models, including the amounts received and paid by the Choice Privileges Loyalty Program as well as the recognition of points earned and redeemed during the period. With the assistance of our actuarial specialists, we evaluated management's methodologies as well as the actuarial assumptions used in estimating the Choice Privileges Loyalty Program expected redemption rates. |
|  | ***Choice Hotels Canada Acquisition*** |
| *Description of the Matter* | On July 2, 2025, the Company completed its acquisition of the remaining 50% of the outstanding shares of Choice Hotels Canada, Inc. ("Choice Hotels Canada") for a purchase price of approximately $114.5 million, as disclosed in Note 17 to the consolidated financial statements. <br>Auditing the Company's accounting for its acquisition was complex due to the estimation uncertainty in the Company's determination of the fair value of identified intangible assets, which consisted of franchise agreements and reacquired territory rights. The estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying significant assumptions. The Company used a discounted cash flow model to measure the franchise agreements and reacquired territory rights intangible assets. The significant assumptions used to estimate the value of these assets included discount rates and the forecasted cash flows. These significant assumptions are forward-looking and could be affected by future economic and market conditions. |
| *How We Addressed the Matter in Our Audit* | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the accounting for the acquisition. For example, we tested controls over management's review of the valuation models, the significant assumptions used to develop the estimates, and the completeness and accuracy of the data used in the valuations. <br>To test the estimated fair value of the acquired intangible assets, including the franchise agreements and reacquired territory rights, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodologies and testing the significant assumptions, including the forecasted cash flows and the selected discount rates used by the Company's valuation specialist. Our procedures included evaluating the completeness and accuracy of the underlying data supporting the significant assumptions in management's estimates. We involved our valuation specialists to assist with our evaluation of the valuation methodologies used by the Company and significant assumptions included in the fair value estimates. For example, we compared the significant assumptions to the Company's historical performance, to the historical results of the acquired business, and to current industry, market, and economic trends. |

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/s/ Ernst & Young LLP

We have served as the Company's auditor since 2014.

Tysons, Virginia

February 19, 2026

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**CONSOLIDATED FINANCIAL STATEMENTS** 

**CHOICE HOTELS INTERNATIONAL, INC.**

**CONSOLIDATED STATEMENTS OF INCOME**

**(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)**

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| | | | |
|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2025** | **2024** | **2023** |
| **REVENUES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise and management fees | $**673197** | $669637 | $652060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Partnership services and fees | **113789** | 99491 | 91790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | **121373** | 113459 | 97641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **72230** | 64060 | 55097 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue for reimbursable costs from franchised and managed properties | **616204** | 638192 | 647577 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | **1596793** | 1584839 | 1544165 |
| **OPERATING EXPENSES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | **328958** | 312388 | 312701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business combination, diligence and transition costs | **4701** | 17233 | 55778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **59715** | 51953 | 45038 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | **91684** | 83148 | 71474 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable expenses from franchised and managed properties | **663336** | 656344 | 680410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | **1148394** | 1121066 | 1165401 |
| **Impairment of long-lived assets** | **—** |  | (3736) |
| **Operating income** | **448399** | 463773 | 375028 |
| **OTHER EXPENSES AND (INCOME), NET** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | **91148** | 87131 | 63780 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | **(6237)** | (8646) | (7764) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain from an acquisition of a joint venture | **(100025)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of assets | **(713)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on extinguishment of debt | **—** | 331 | (4416) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other (gains) losses, net | **(6989)** | 1641 | (10649) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in net loss (gain) of affiliates | **14324** | (12329) | (2879) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expenses and (income), net** | **(8492)** | 68128 | 38072 |
| **Income before income taxes** | **456891** | 395645 | 336956 |
| **Income tax expense** | **86945** | 95980 | 78449 |
| **Net income** | $**369946** | $299665 | $258507 |
| **Basic earnings per share** | $**7.97** | $6.26 | $5.11 |
| **Diluted earnings per share** | $**7.90** | $6.20 | $5.07 |

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The accompanying notes are an integral part of these consolidated financial statements.

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**CHOICE HOTELS INTERNATIONAL, INC.**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(IN THOUSANDS)**

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|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2025** | **2024** | **2023** |
| **Net income** | $**369946** | $299665 | $258507 |
| Other comprehensive income (loss), net of tax: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | **886** | (522) | (460) |
| **Other comprehensive income (loss), net of tax:** | **886** | (522) | (460) |
| **Comprehensive income** | $**370832** | $299143 | $258047 |

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The accompanying notes are an integral part of these consolidated financial statements.

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**CHOICE HOTELS INTERNATIONAL, INC.**

**CONSOLIDATED BALANCE SHEETS**

**(IN THOUSANDS, EXCEPT SHARE AMOUNTS)**

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31,<br>2024** |
| **ASSETS** | | |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**44997** | $40177 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivables (net of allowance for credit losses of $51,189 and $45,610, respectively) | **207491** | 176672 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes receivable | **13456** | 5419 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes receivable (net of allowance for credit losses of $7,462 and $5,805, respectively) | **94686** | 75501 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | **45368** | 41317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | **405998** | 339086 |
| Property and equipment, net | **649291** | 604345 |
| Operating lease right-of-use assets | **77670** | 83451 |
| Goodwill | **305758** | 220187 |
| Intangible assets, net | **1082486** | 884013 |
| Notes receivable (net of allowance for credit losses of $1,019 and $1,526, respectively) | **12490** | 32682 |
| Investments for employee benefit plans, at fair value | **50227** | 47603 |
| Investments in affiliates | **134975** | 117016 |
| Deferred income taxes | **75371** | 108308 |
| Other assets | **123937** | 93836 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**2918203** | $2530527 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $**156276** | $134865 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | **125282** | 136729 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | **100698** | 102114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability for guest loyalty program | **85035** | 89013 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | **467291** | 462721 |
| Long-term debt | **1906122** | 1768526 |
| Long-term deferred revenue | **130505** | 132259 |
| Deferred compensation and retirement plan obligations | **56532** | 53316 |
| Deferred income taxes | **25303** |  |
| Operating lease liabilities | **107963** | 113255 |
| Liability for guest loyalty program | **39771** | 40607 |
| Other liabilities | **3487** | 5114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **2736974** | 2575798 |
| Commitments and contingencies (Note 16) |  |  |
| Common stock, $0.01 par value; 160,000,000 shares authorized; 95,065,638 shares issued at December 31, 2025 and December 31, 2024; 45,996,087 and 46,856,567 shares outstanding at December 31, 2025 and December 31, 2024, respectively | **951** | 951 |
| Additional paid-in-capital | **403927** | 370201 |
| Accumulated other comprehensive loss | **(5307)** | (6193) |
| Treasury stock, at cost; 49,069,551 and 48,209,071 shares at December 31, 2025 and December 31, 2024, respectively | **(2536373)** | (2411527) |
| Retained earnings | **2318031** | 2001297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total shareholders' equity (deficit)** | **181229** | (45271) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and shareholders' equity (deficit)** | $**2918203** | $2530527 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

 **CHOICE HOTELS INTERNATIONAL, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(IN THOUSANDS)**

---

| | | | |
|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2025** | **2024** | **2023** |
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $**369946** | $299665 | $258507 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **59715** | 51953 | 45038 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization – reimbursable expenses from franchised and managed properties | **19554** | 18907 | 30697 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise agreement acquisition cost amortization | **31966** | 28702 | 20024 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain from an acquisition of a joint venture | **(100025)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of assets | **(713)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on extinguishment of debt | **—** | 331 | (4416) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on impairment of long-lived assets | **—** |  | 3736 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash share-based compensation and other charges | **38254** | 43250 | 46809 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest, investments, and affiliate income, net | **(6439)** | (7282) | (8747) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | **19764** | (19028) | (1336) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in net loss (gain) of affiliates, less distributions received | **19848** | (2327) | (1570) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise agreement acquisition costs, net of reimbursements | **(83444)** | (112164) | (98316) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in working capital and other | **(97979)** | 17396 | 6128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | **270447** | 319403 | 296554 |
| **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in other property and equipment | **(38924)** | (39102) | (47717) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in owned hotel properties | **(106871)** | (106750) | (68560) |
| &nbsp;&nbsp;&nbsp;&nbsp;Contributions to investments in affiliates | **(93675)** | (52768) | (38930) |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuances of notes receivable | **(6885)** | (37994) | (4323) |
| &nbsp;&nbsp;&nbsp;&nbsp;Collections of notes receivable | **7373** | 32100 | 10852 |
| &nbsp;&nbsp;&nbsp;&nbsp;Business acquisition, net of cash acquired | **(73395)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of assets | **52000** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of equity securities | **—** |  | (112420) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of equity securities | **—** | 108149 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions from sales of affiliates | **44617** | 15850 | 868 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other items, net | **(2504)** | (4056) | (5396) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | **(218264)** | (84571) | (265626) |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net borrowings (repayments) pursuant to revolving credit facilities | **132982** | 111500 | (131500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the issuance of long-term debt | **—** | 593574 | 500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from economic development loans | **1850** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of long-term debt | **—** | (500000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs | **—** | (8069) | (1553) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of treasury stock | **(138304)** | (380743) | (362772) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid | **(53472)** | (55497) | (56457) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the exercise of stock options | **6841** | 17525 | 6345 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in financing activities** | **(50103)** | (221710) | (45937) |
| **Net change in cash and cash equivalents** | **2080** | 13122 | (15009) |
| Effect of foreign exchange rate changes on cash and cash equivalents | **2740** | 301 | 197 |
| **Cash and cash equivalents, beginning of period** | **40177** | 26754 | 41566 |
| **Cash and cash equivalents, end of period** | $**44997** | $40177 | $26754 |

---

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

---

| | | | |
|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2025** | **2024** | **2023** |
| **Supplemental disclosure of cash flow information:** |  |  |  |
| &nbsp;&nbsp;**Cash payments during the year for** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal income taxes, net of refunds and transferable tax credits | $**65295** | $85880 | $71161 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State income taxes, net of refunds <sup>(1)</sup>  | $**14325** | $18237 | $20771 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign income taxes, net of refunds <sup>(1)</sup>  | $**5088** | $4056 | $2410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest, net of capitalized interest | $**90310** | $67176 | $60773 |
| **Non-cash investing and financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends declared but not paid | $**13218** | $13471 | $14902 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in property, equipment, and intangible assets recognized in accounts payable and accrued expense liabilities | $**18273** | $23284 | $10291 |

---

(1) In 2025, 2024, and 2023, there were no individual jurisdictions for which the cash income taxes paid equaled or exceeded 5% of the total cash income taxes paid.

The accompanying notes are an integral part of these consolidated financial statements.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**CHOICE HOTELS INTERNATIONAL, INC.**

**CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)** 

**(IN THOUSANDS, EXCEPT SHARE AMOUNTS)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common<br>Stock -<br>Shares<br>Outstanding** | **Common<br>Stock -<br>Par<br>Value** | **Additional<br>Paid-in-<br>Capital** | **Accumulated Other Comprehensive Income (Loss)**<sup>(2)</sup> | **Treasury<br>Stock** | **Retained<br>Earnings** | **Total** |
| Balance as of December 31, 2022 | 52200903 | $951 | $298053 | $(5211) | $(1694857) | $1555724 | $154660 |
| Net income |  |  |  |  |  | 258507 | 258507 |
| Other comprehensive loss, net of tax |  |  |  | (460) |  |  | (460) |
| Share-based payment activity <sup>(1)</sup> | 366121 |  | 32697 |  | 13889 |  | 46586 |
| Dividends declared ($1.15 per share) |  |  |  |  |  | (57872) | (57872) |
| Treasury purchases | (3040779) |  |  |  | (365823) |  | (365823) |
| Balance as of December 31, 2023 | 49526245 | $951 | $330750 | $(5671) | $(2046791) | $1756359 | $35598 |
| Net income |  |  |  |  |  | 299665 | 299665 |
| Other comprehensive loss, net of tax |  |  |  | (522) |  |  | (522) |
| Share-based payment activity <sup>(1)</sup> | 437268 |  | 39451 |  | 13659 |  | 53110 |
| Dividends declared ($1.15 per share) |  |  |  |  |  | (54727) | (54727) |
| Treasury purchases | (3106946) |  |  |  | (378395) |  | (378395) |
| Balance as of December 31, 2024 | 46856567 | $951 | $370201 | $(6193) | $(2411527) | $2001297 | $(45271) |
| **Net income** | **—** | **—** | **—** | **—** | **—** | **369946** | **369946** |
| **Other comprehensive income, net of tax** | **—** | **—** | **—** | **886** | **—** | **—** | **886** |
| **Share-based payment activity** <sup>(1)</sup> | **231270** | **—** | **33726** | **—** | **10711** | **—** | **44437** |
| **Dividends declared ($1.15 per share)** | **—** | **—** | **—** | **—** | **—** | **(53212)** | **(53212)** |
| **Treasury purchases** | **(1091750)** | **—** | **—** | **—** | **(135557)** | **—** | **(135557)** |
| **Balance as of December 31, 2025** | **45996087** | $**951** | $**403927** | $**(5307)** | $**(2536373)** | $**2318031** | $**181229** |

---

<sup>(1)</sup> During certain periods presented, accumulated dividends were paid to certain shareholders upon vesting of their PVRSUs, which are presented in Share-based payment activity.

<sup>(2)</sup> Accumulated other comprehensive income (loss) relates entirely to foreign currency items. There were no amounts reclassified from accumulated other comprehensive income (loss) during the years ended December 31, 2025, 2024, and 2023.

The accompanying notes are an integral part of these consolidated financial statements.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**CHOICE HOTELS INTERNATIONAL, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1. Basis of Presentation and Significant Accounting Policies** 

*Basis of Presentation*

The accompanying consolidated financial statements of Choice Hotels International, Inc. and subsidiaries (collectively, "Choice" or the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying consolidated financial statements include all adjustments that are necessary to fairly present the Company's financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain prior year amounts in our consolidated financial statements have been reclassified in order to maintain comparability with the current year presentation. The reclassifications were not as a result of any error in our consolidated financial statements.

The Company reclassified certain prior year amounts in the consolidated statements of income in order to maintain comparability with the current year presentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Royalty, licensing and management fees were revised to franchise and management fees in the consolidated statements of income, and now include the revenues previously presented in royalty, licensing and management fees, with the exception of partnership licensing revenues which are now presented in partnership services and fees in the consolidated statements of income, and the addition of the revenues generated from programs, platforms, and services associated with the Company's franchise operations which were previously presented in other revenues from franchised and managed properties in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Initial franchise fees, which were previously presented as a standalone financial statement line item, are now presented within franchise and management fees in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Platform and procurement services fees were revised to partnership services and fees in the consolidated statements of income, and now include the revenues previously presented in platform and procurement services fees, with the exception of the revenues from the Company's annual franchisee convention which are now presented in other revenues, the addition of partnership licensing revenues which were previously presented in royalty, licensing and management fees, and the addition of the revenues generated from other non-franchising agreements which are primarily software as a service ("SaaS") arrangements for non-franchised hoteliers which were previously presented in other revenues in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other revenues from franchised and managed properties were revised to revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income, and now include the revenues previously presented in other revenues from franchised and managed properties, with the exception of the revenues generated from programs, platforms, and services associated with the Company's franchise operations which are now presented in franchise and management fees in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Selling, general and administrative expenses were revised to include the expenses incurred related to programs, platforms, and services associated with the Company's franchise operations, which were previously presented in other expenses from franchised and managed properties in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Depreciation and amortization was revised to include amortization expense from information technology platforms, which was previously presented in other expenses from franchised and managed properties in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other expenses from franchised and managed properties were revised to reimbursable expenses from franchised and managed properties in the consolidated statements of income, and now include the expenses previously presented in other expenses from franchised and managed properties, with the exception of the expenses incurred from programs, platforms, and services associated with the Company's franchise operations which are now presented in selling, general and administrative expenses, and amortization expense from information technology platforms which is now presented in depreciation and amortization expense in the consolidated statements of income.

The reclassifications had no effect on the Company's previously reported total revenues, total operating expenses, operating income, or net income.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

The following table presents the effect of the reclassifications on the years ended December 31, 2024 and December 31, 2023 consolidated statements of income.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
| | **As previously reported** | **Reclassification** | **As reclassified** | **As previously reported** | **Reclassification** | **As reclassified** |
| **REVENUES** | | | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise and management fees | $514569 | $155068 | $669637 | $513412 | $138648 | $652060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial franchise fees | 25606 | (25606) |  | 27787 | (27787) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Partnership services and fees | 75752 | 23739 | 99491 | 75114 | 16676 | 91790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | 113459 |  | 113459 | 97641 |  | 97641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 61803 | 2257 | 64060 | 46051 | 9046 | 55097 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue for reimbursable costs from franchised and managed properties | 793650 | (155458) | 638192 | 784160 | (136583) | 647577 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | 1584839 |  | 1584839 | 1544165 |  | 1544165 |
| **OPERATING EXPENSES** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 219878 | 92510 | 312388 | 216081 | 96620 | 312701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business combination, diligence and transition costs | 17233 |  | 17233 | 55778 |  | 55778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 43282 | 8671 | 51953 | 39659 | 5379 | 45038 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Owned hotels | 83148 |  | 83148 | 71474 |  | 71474 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable expenses from franchised and managed properties | 757525 | (101181) | 656344 | 782409 | (101999) | 680410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | 1121066 |  | 1121066 | 1165401 |  | 1165401 |
| **Impairment of long-lived assets** |  |  |  | (3736) |  | (3736) |
| **Operating income** | $463773 | $— | $463773 | $375028 | $— | $375028 |

---

The Company also reclassified certain prior year amounts in the consolidated statements of cash flows in order to maintain comparability with the current year presentation. Depreciation and amortization was revised to include amortization expense from information technology platforms, which was previously presented in depreciation and amortization - other expenses from franchised and managed properties in the consolidated statements of cash flows. Depreciation and amortization - other expenses from franchised and managed properties was revised to depreciation and amortization - reimbursable expenses from franchised and managed properties in the consolidated statements of cash flows. Federal income taxes, net of refunds and transferable tax credits, state income taxes, net of refunds, and foreign income taxes, net of refunds, which were previously presented in income taxes, net of refunds, are now presented within standalone financial statement line items in the consolidated statements of cash flows. The reclassifications had no effect on the Company's previously reported net cash provided by operating activities, the net cash used in investing activities, or the net change in cash and cash equivalents.

*Revenue Recognition*

*Franchise Agreements*

The Company's revenues are primarily derived from franchise agreements with third-party hotel owners. The majority of the Company's performance obligations are a series of distinct services, which are described in more detail below, for which the Company receives variable consideration through franchise fees. The Company enters into franchise agreements to provide franchisees with a limited non-exclusive license to utilize the Company's registered brand tradenames and trademarks, marketing and reservation services, and other miscellaneous franchise services. These agreements typically have an initial term of 10 to 30 years with provisions permitting the franchisees or the Company to terminate the franchise agreement upon designated anniversaries of the hotel opening before the end of the initial term. An up-front initial franchise fee is assessed to the third-party hotel owners to affiliate with our brands, which is typically paid prior to the execution of the franchise agreement and is non-refundable. After hotel opening, franchise fees are typically generated based on a percentage of gross room revenues

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or as designated transactions and events occur (such as when a reservation is delivered to the hotel through a specified channel) and are invoiced by the Company in the following month.

The franchise agreements are comprised of multiple performance obligations, which may require significant judgment in identifying. The primary performance obligations are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *License of brand intellectual property and related services* ("brand intellectual property") - Grants the right to access the Company's intellectual property associated with the brand tradenames, trademarks, reservation systems, property management systems, and related services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Material rights for free or discounted goods or services to hotel guests -* Primarily consists of the points issued under the Company's guest loyalty program, Choice Privileges.

*License of Brand Intellectual Property and Related Services*

The fees generated from brand intellectual property are recognized to revenue over time as the hotel owners pay for access to these services for the duration of the franchise agreement. The franchise fees are typically based on the sales or usage of the underlying hotel (i.e., after the completion of a hotel stay), with the exception of fixed up-front fees that usually represent an insignificant portion of the transaction price. The variable transaction price is determined for the period when the underlying gross room revenues and the transactions or events which generate fees are known.

Franchise fees include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Royalty fees -* Royalty fees are earned in exchange for a license to brand intellectual property typically based on a percentage of gross room revenues. The royalty fees are billed and collected monthly and the revenues are recognized in the same period that the underlying gross room revenues are earned by the Company's franchisees. The royalty fees are presented within franchise and management fees in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Initial franchise fees -* Initial franchise fees are charged when (i) new hotels enter the franchise system, (ii) there is a change of ownership, or (iii) the existing franchise agreements are extended. The initial franchise fees are recognized as revenue ratably as the services are provided over the enforceable period of the franchise agreement, unless the franchise agreement is terminated and the hotel exits the franchise system whereby the remaining deferred amounts are recognized to revenue in the period of termination. The enforceable period is the period from the hotel's opening to the first point the franchisee or the Company can terminate the franchise agreement without incurring a significant penalty. The initial franchise fees are presented within franchise and management fees in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *System implementation fees -* System implementation fees charged to the franchisees are deferred and recognized as revenue over the enforceable period of the franchise agreement. The system implementation fees charged to the franchisees are primarily presented within franchise and management fees in the consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Other fees -* Other fees are a combination of miscellaneous non-marketing and reservation fees, which includes quality assurance, non-compliance, and franchisee training fees. Other fees are recognized in the period that the designated transaction or event has occurred. Other fees are presented within franchise and management fees and other revenues in the consolidated statements of income.

The Company's franchise agreements require the payment of marketing and reservation fees. The Company is obligated to use these marketing and reservation fees to provide marketing and reservation services, such as marketing, media, advertising, access to centralized reservation systems, and certain franchise services to support the operation of the overall franchise system. The marketing and reservation fees are presented within revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income. These services are comprised of multiple fees including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fees based on a percentage of gross room revenues are recognized in the period the gross room revenue was earned, based on the underlying hotel's sales or usage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fees based on the occurrence of a designated transaction or event are recognized in the period the transaction or event occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Marketing and reservation system activities also include revenues generated from the Company's guest loyalty programs. The revenue recognition of these programs is discussed in the *Material rights for free or discounted goods or services to hotel guests* section below*.*

Marketing and reservation expenses are the expenses that are incurred to facilitate the delivery of the marketing and reservation services, including direct expenses and an allocation of costs for certain administrative activities that are required to carry out

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marketing and reservation services. Marketing and reservation expenses are recognized when the services are incurred or the goods are received within reimbursable expenses from franchised and managed properties in the consolidated statements of income. As a result, the marketing and reservation expenses may not equal the marketing and reservation revenues in a specific period but are expected to equal the revenues earned from the franchisees over time. The Company's franchise agreements provide the Company the right to advance monies to the franchise system when the needs of the franchisor system surpass the balances currently available. The Company has the right to recover such advances in future periods through additional fee assessments or reduced spending.

*Material Rights for Free or Discounted Goods or Services to Hotel Guests* 

Choice Privileges is the Company's guest loyalty program, which enable members to earn points based on their spending levels with the Company's franchisees or certain vendors (refer to the Partnership Agreements section below). The points, which the Company accumulates and tracks on the members' behalf, may be redeemed for free accommodations or other benefits (e.g. gift cards to participating retailers). The Company collects from the franchisees a percentage of the loyalty program members' gross room revenue from completed stays to operate the programs. At such time the points are redeemed for free accommodations or other benefits, the Company reimburses the franchisees or third parties based on a rate derived in accordance with the franchise or vendor agreement.

The loyalty points represent a performance obligation attributable to the usage of the points, and thus the revenues are recognized at the point in time when the loyalty points are redeemed by the members for benefits (with both franchisees and third-party partners), net of the cost of redemptions. For the years ended December 31, 2025, 2024, and 2023, the loyalty net revenues, inclusive of adjustments to the estimated redemption rates, were $125.6 million, $123.2 million, and $93.1 million, respectively. The transaction price is variable and determined in the period when the loyalty points are earned and the underlying gross room revenues are known. No loyalty program revenues are recognized at the time the loyalty points are issued.

The Company is an agent in coordinating the delivery of the services between the loyalty program member and the franchisee or third party, and as a result, the revenues are recognized net of the cost of redemptions. The estimated value of the future redemptions is reflected in the current and non-current liability for guest loyalty program in the consolidated balance sheets. The liability for the guest loyalty program is developed based on an estimate of the eventual redemption rates and point values using various actuarial methods. These significant judgments determine the required point liability attributable to the outstanding points, which is relieved as the redemption costs are processed. The amount of the loyalty program fees in excess of the guest loyalty program point liability represents current and non-current deferred revenue, which is recognized to revenue as the points are redeemed including an estimate of the future forfeitures ("breakage"). The anticipated redemption pattern of the points is the basis for the current and non-current designation of each liability. As of December 31, 2025, the current and non-current deferred revenue balances were $78.2 million and $36.7 million, respectively. The loyalty points are typically redeemed within three years of issuance. The loyalty program point redemption revenues are presented within revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income.

*Partnership Agreements*

The Company is a party to various agreements with third-party partners, including the co-branding of the Choice Privileges credit card. The agreements typically provide for use of the Company's marks, limited access to the Company's distribution channels, and the sale of Choice Privileges loyalty points, in exchange for fees primarily comprising variable consideration that is paid each month. Loyalty members can earn points through participation in the partner's program.

The partnership agreements include multiple performance obligations. The primary performance obligations are for the brand intellectual property and material rights for free or discounted goods or services to hotel guests. The allocation of the fixed and variable consideration to the performance obligations is based on the standalone selling price, which is estimated based on the market and income methods, which contain significant judgments. The amounts allocated to the brand intellectual property are recognized on a gross basis over time using the output measure of the time elapsed and presented within partnership services and fees in the consolidated statements of income. The amounts allocated to the material rights for free or discounted goods or services to hotel guests are recognized to revenue as the points are redeemed including an estimate of the breakage and presented within revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income.

*Qualified Vendors*

The Company generates revenue from qualified vendors. The qualified vendor revenue is generally based on the marketing services provided by the Company on behalf of, and the access provided to, the qualified vendors to the hotel owners and guests. The Company provides these services in exchange for either fixed consideration or a percentage of the revenues earned by the qualified vendor pertaining to purchases by the Company's franchisees or guests. The fixed consideration is paid in

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installments based on a contractual schedule, with an initial payment typically due at contract execution. The variable consideration is typically paid quarterly after the sales to the franchisees or guests have occurred.

The qualified vendor agreements comprise a single performance obligation, which is satisfied over time based on the access afforded, and the services provided, to the qualified vendor for the stated duration of the agreement. The fixed consideration is allocated and recognized ratably to each period over the term of the agreement. The variable consideration is determined and recognized in the period when the vendors' sales to the franchisees or guests are known or the cash payment has been remitted. The qualified vendor revenues are presented within partnership services and fees in the consolidated statements of income.

*SaaS Arrangements*

The Company is a party to other non-franchising agreements that generate revenue, which are primarily SaaS arrangements for non-franchised hoteliers, and is presented within partnership services and fees in the consolidated statements of income. SaaS agreements typically include fixed consideration for installment and other initiation fees that are paid at the beginning of the contract, and variable consideration for recurring subscription revenue that is typically paid on a monthly basis. SaaS agreements comprise a single performance obligation, which is satisfied over time based on the access to the software for the stated duration of the agreement. The fixed consideration is allocated and recognized ratably to each period over the term of the agreement. The variable consideration is determined at the conclusion of each period, and allocated to and recognized in the current period.

*Managed Hotels*

The Company manages 13 hotels (inclusive of four owned hotels). The management agreements provide for the use of the Company's marks and hotel management services, which include providing day-to-day management services in the operation of the hotels for the hotel owners. The fees generated from the management agreements are recognized to revenue over time as the hotel owners pay for access to these services for the duration of the management agreement, and include base and incentive management fees. Base management fees are generally based on a percentage of the hotel's monthly gross revenue and are invoiced and collected monthly. Incentive management fees are generally based on a percentage of the hotel's operating profits and are invoiced on an annual basis. Base and incentive management fee revenues are presented within franchise and management fees in the consolidated statements of income.

The Company's management agreements include amounts that are contractually reimbursed to the Company by the hotel owners, either directly or indirectly, relating to certain costs and expenses that are paid by the Company in support of the operations of these hotel properties. The reimbursements include payroll costs and certain other operating costs of the managed properties' operations, which are reimbursed to the Company by the hotel owners as the expenses are incurred. The revenue related to these direct reimbursements is recognized based on the amount of the expenses incurred by the Company, which are presented within reimbursable expenses from franchised and managed properties in the consolidated statements of income. The hotel owner typically reimburses the Company on a monthly basis, which results in no net effect to operating income or net income. The revenues related to marketing and reservations are recognized over time and are intended to reimburse the Company, indirectly, for the expenses incurred in performing the marketing and reservation services. These managed revenues are presented within revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income.

*Owned Hotels*

The Company owned 17 hotels, 12 hotels, and 10 hotels as of December 31, 2025, 2024, and 2023, respectively, from which the Company generates revenues. As a hotel owner, the Company has performance obligations to provide accommodations to hotel guests and in return, the Company earns a nightly fee for an agreed upon period that is generally payable at the time the hotel guest checks out of the hotel. The Company typically satisfies the performance obligations over the length of the stay and recognizes the revenue on a daily basis, as the hotel rooms are occupied and the services are rendered.

Other ancillary goods and services at the owned hotels are purchased independently of the hotel stay at the standalone selling prices and are considered separate performance obligations, which are satisfied at the point in time when the related good or service is provided to the guest. These primarily consist of food and beverage, incidentals, and parking fees. The hotel room night and other ancillary goods and services revenues are presented within owned hotels revenue in the consolidated statements of income.

*Sales Taxes*

The Company presents the taxes collected from customers and then remitted to governmental authorities on a net basis and, therefore, the taxes are excluded from revenues in the consolidated financial statements.

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*Business Combination, Diligence and Transition Costs*

The Company incurs costs during the review of potential business combinations, including legal fees, financial advisory, and other professional service fees. If the Company is successful in completing a business combination, then the Company may incur transition and integration costs, including professional service fees, technology costs, and employee-related costs such as bonuses, retention, and severance. The business combination, diligence and transition costs are expensed as incurred in the consolidated statements of income.

*Notes & Accounts Receivable and Allowances for Credit Losses*

The Company provides financing in the form of notes receivable loans to franchisees to support the development or conversion of properties in strategic markets.

The Company accrues interest for notes receivable loans in accordance with loan provisions. The Company considers notes receivable loans past due and in default when payments are not made when due in accordance with the then-current loan provisions or the terms extended to the borrowers, including loans with concessions or interest deferral. The Company suspends the accrual of interest when payments on loans are more than 30 days past due or upon a loan being classified as collateral-dependent. The Company applies the payments received for loans on a non-accrual status first to interest and then to principal. The Company does not resume an interest accrual until all delinquent payments are received based on the then-current loan provisions.

The Company has developed a systematic methodology to determine its allowance for credit losses across our portfolio of notes receivable loans. The Company monitors the risk and performance of our portfolio by the level of security in the collateral (i.e., senior, subordinated, or unsecured), which is the Company's credit quality indicator. As each of the Company's notes receivable loans has unique risk characteristics, the Company deploys its methodology to calculate allowances for credit losses at the individual notes receivable loan level.

The Company primarily utilizes a discounted cash flow ("DCF") technique to measure the credit allowance, influenced by the key economic variables of each note receivable loan. The Company identified the key economic variables for these loans to be the loan-to-cost ("LTC") or loan-to-value ("LTV") ratios and a debt service coverage ratio ("DSCR"). The LTC or LTV ratio represents the loan principal relative to the project cost or value and is an indication of the loan principal's ability to be re-paid at loan maturity. The DSCR represents property-specific net operating income as a percentage of the interest and principal payments incurred (i.e., debt service) on all debt of the borrower for the property and is an indication of the borrower's ability to make timely payments during the term of the loan. The LTC or LTV ratios and DSCR are considered during the loan underwriting process as indications of risk and, accordingly, we believe these factors are the most representative risk indicators for calculating the allowance for credit loss. Loans with higher LTC or LTV ratios and lower DSCR ratios generally are representative of loans with greater risk and, accordingly, have higher credit allowances as a percentage of loan principal. Conversely, loans with lower LTC or LTV ratios and higher DSCR ratios generally are representative of loans with lesser risk and, accordingly, have lower credit allowances as a percentage of loan principal. In preparing or updating a DCF model to measure the credit allowance, the Company develops various recovery scenarios and, based on the key economic variables, the present status of the loan, and the underlying collateral, applies a probability-weighting to the outputs of the scenarios.

Collateral-dependent financial assets are financial assets for which repayment is expected to be derived substantially through the operation or sale of the collateral and when the borrower is experiencing financial difficulty. For collateral-dependent loans, the expected credit losses are based on the fair value of the collateral, less the selling costs if repayment will be from the sale of the collateral. The Company calculates the fair value of the collateral using a DCF technique to project the cash flows or a market approach via quoted market prices. In developing the cash flow projections, the Company will review the borrower's financial statements for the property, economic trends, industry projections for the market where the property is located, and comparable sales capitalization rates.

Management assesses the credit quality of the notes receivable portfolio and the adequacy of the credit loss allowances on a quarterly basis and recognizes the provisions for credit losses in selling, general and administrative expenses in the consolidated statements of income. Significant judgment is required in this analysis.

Accounts receivable consists primarily of the franchise and related fees due from the hotel franchisees and are recorded at the invoiced amount. The allowance for credit losses is the Company's best estimate of the amount of expected credit losses inherent in the accounts receivable balance. The Company determines the allowance considering its historical write-off experience, a review of the aged receivable balances and customer payment trends, the economic environment, and other available evidence. The Company presents the provisions for credit losses on accounts receivable in selling, general and administrative expenses and reimbursable expenses from franchised and managed properties in the consolidated statements of income.

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When the Company determines that a trade or note receivable is not collectible, then the account is written-off to the associated allowance for credit losses.

Refer to Note 3 for more information on the receivables and the allowances for credit losses.

*Advertising Costs*

The Company expenses advertising costs as incurred. Advertising expense was $207.8 million, $194.6 million, and $195.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. The Company presents advertising costs primarily in reimbursable expenses from franchised and managed properties in the consolidated statements of income.

*Cash and Cash Equivalents*

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains cash balances at U.S. banks, which at times may exceed the limits of the amounts insured by the Federal Deposit Insurance Corporation. In addition, the Company also maintains cash balances at international banks which do not provide deposit insurance.

*Capitalization Policies*

Property and equipment are generally recorded at cost and depreciated for financial reporting purposes using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Major renovations and replacements incurred during construction are capitalized. The costs for computer software developed for internal use are capitalized during the application development stage and amortized using the straight-line method over the estimated useful lives of the software. The capitalized software licenses pertaining to cloud computing arrangements are amortized using the straight-line method over the shorter of the cloud computing arrangement term or the estimated useful lives of the software. The Company capitalizes the interest incurred during the construction and development of property and equipment, including software. The total interest capitalized as a cost of property and equipment was $8.1 million and $9.4 million during the years ended December 31, 2025 and 2024, respectively.

As construction in progress and software development are completed and then placed in service, the assets are transferred to the appropriate property and equipment categories and depreciation and amortization begins. Upon the sale or the retirement of the property, the cost and the related accumulated depreciation are eliminated from the accounts and any related gain or loss is recognized in the consolidated statements of income. Repairs and maintenance, and minor replacements, are charged to expense as incurred.

The Company has made certain acquisitions of hotel assets, which are recognized at the fair value of the consideration exchanged. The Company acquires land parcels with the intention to develop hotels, which are recognized at cost within property and equipment, net in the consolidated balance sheets. If the Company determines that it will not progress to active construction and development of a land parcel, then the land parcel is reclassified to other assets in the consolidated balance sheets.

The table below summarizes the estimated useful lives for the respective assets for depreciation and amortization purposes:

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| | |
|:---|:---|
| Computer equipment and software | 2 - 7 years |
| Buildings and leasehold improvements | 10 - 40 years |
| Furniture, fixtures, vehicles and equipment | 3 - 10 years |

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*Assets Held for Sale*

The Company considers assets to be held for sale when all of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management commits to a plan to sell an asset;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• It is unlikely that the disposal plan will be significantly modified or discontinued;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The asset is available for immediate sale in its present condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Actions required to complete the sale of the asset have been initiated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The sale of the asset is probable and the Company expects the completed sale will occur within one year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The asset is actively being marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, the Company recognizes the carrying value of each asset as a component of other current assets at the lower of its carrying value or its estimated fair value, less the estimated costs to sell, and immediately ceases the recognition of depreciation or amortization expense on the asset.

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If, at any time, these criteria are no longer met, subject to certain exceptions, then the assets previously classified as held for sale are reclassified as held and used and measured individually at the lower of (a) the carrying amount before the asset was classified as held for sale, adjusted for any depreciation or amortization expense that would have been recognized had the asset been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

*Long-Lived Assets, Goodwill, and Intangible Assets*

The Company groups its long-lived assets, including property and equipment and definite-lived intangible assets (e.g., franchise rights and franchise agreement acquisition costs), at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company evaluates the potential impairment of its long-lived asset groups annually as of October 1st or earlier when other circumstances indicate that the Company may not be able to recover the carrying value of the asset group. During the year ended December 31, 2025, the Company changed its annual impairment assessment date from December 31st to October 1st. When indicators of impairment are present, then the recoverability is assessed based on undiscounted expected cash flows. If the undiscounted expected cash flows are less than the carrying amount of the asset group, then an impairment charge is measured and recognized, as applicable, for the excess of the carrying value over the fair value of the asset group. The fair value of the long-lived asset groups are estimated primarily using discounted cash flow analyses representing the highest and best use by an independent market participant. Significant management judgment is involved in evaluating any indicators of impairment and developing any required projections to test for the recoverability or the estimated fair value.

The Company did not identify any indicators of impairment of long-lived assets from the Hotel Franchising reporting unit during the years ended December 31, 2025, 2024, and 2023, other than impairments on franchise sales commission assets and franchise agreement acquisition cost intangible assets, which are presented within selling, general and administrative expenses and reimbursable expenses from franchised and managed properties in the consolidated statements of income. Refer to Note 2 for additional information.

During the year ended December 31, 2023, the Company recognized an impairment loss on the long-lived assets associated with the legacy Radisson corporate office lease. Refer to Note 5 for additional information.

The Company evaluates the impairment of goodwill and intangible assets with indefinite lives annually as of October 1st or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization that indicate that the Company may not be able to recover the carrying amount of the asset. During the year ended December 31, 2025, the Company changed its annual impairment assessment date from December 31st to October 1st. In evaluating these assets for impairment, the Company may elect to first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit or the indefinite-lived intangible asset is less than its carrying amount. If the conclusion is that it is not more likely than not that the fair value of the asset is less than its carrying value, then no further testing is required. If the conclusion is that it is more likely than not that the fair value of the asset is less than its carrying value, then a quantitative impairment test is performed whereby the carrying value is compared to the fair value of the asset and an impairment charge is recognized, as applicable, for the excess of the carrying value over the fair value. The Company may elect to forgo the qualitative assessment and move directly to the quantitative impairment tests for goodwill and indefinite-lived intangible assets. The Company determines the fair value of its reporting units and indefinite-lived intangible assets using the income and market methods.

Goodwill is allocated to the Company's reporting units. The Company's reporting units are determined primarily by the availability of discrete financial information relied upon by the chief operating decision maker ("CODM") to assess performance and make operating segment resource allocation decisions. As of December 31, 2025, the Company's goodwill is allocated solely to the Hotel Franchising reporting unit. The Company performed the qualitative impairment analysis for the Hotel Franchising reporting unit, concluding that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. As such, a quantitative test was not required and no impairment was recorded.

*Variable Interest Entities*

In accordance with the guidance for the consolidation of variable interest entities ("VIE"), the Company identifies its variable interests and analyzes to determine if the entity in which the Company has a variable interest is a VIE. The Company's variable interests include equity investments, loans, and guaranties. The determination of whether a variable interest is a VIE includes both quantitative and qualitative considerations. For those entities determined to be VIEs, a further quantitative and qualitative analysis is performed to determine if the Company is deemed to be the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly impacts the entity's economic performance and who has an obligation to absorb the losses of the entity or a right to receive the benefits from the entity that could potentially be significant. The Company consolidates those entities in which it is determined to be the primary beneficiary. As of December 31, 2025, the Company is not the primary beneficiary of any VIE. The Company's qualitative analysis is based on its review of

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the design of the entity, the organizational structure including its decision-making ability, and the relevant development, operating management, and financial agreements.

The investments in unconsolidated affiliates where the Company is not deemed to be the primary beneficiary but where the Company exercises significant influence over the operating and financial policies of the investee are accounted for using the equity method of accounting.

*Investments in Affiliates* 

The Company evaluates an investment in an affiliate for impairment when circumstances indicate that the carrying value may not be recoverable, such as a loan default, significant under-performance relative to historical or projected operating performance, and/or significant negative industry, market, or economic trends. When there is an indication that a loss in value has occurred, the Company evaluates the carrying value compared to the estimated fair value of the investment. The fair value is based upon internally-developed discounted cash flow models, third-party appraisals, or current estimated net sales proceeds from pending offers. There are judgments and assumptions in each of these fair value determinations, including our selection of comparable market transactions, the amount and timing of expected future cash flows, long-term growth rates, and sales capitalization rates. These nonrecurring fair value measurements are classified as level three in the fair value measurement hierarchy, as the Company utilizes unobservable inputs which are significant to the overall fair value. If the estimated fair value is less than the carrying value, then management uses its judgment to determine if the decline in value is other-than-temporary. In determining this, the Company considers factors including, but not limited to, the length of time and extent of the decline, loss of value as a percentage of the cost, financial condition, near-term financial projections, the Company's intent and ability to recover the lost value, and current economic conditions. For declines in value that are deemed to be other-than-temporary, then the impairment charge is recognized to earnings.

*Investments in Equity Securities*

The Company's investments in equity securities are recognized at fair value in the consolidated balance sheets, and the unrealized gains and losses on the investments in equity securities are recognized as other (gains) losses, net in the consolidated statements of income. The realized gains and losses on the investments in equity securities are recognized upon the disposition of the equity securities using the specific identification method as other (gains) losses, net in the consolidated statements of income.

*Foreign Operations*

The U.S. dollar is the functional currency of the consolidated entities operating in the U.S. The functional currency for the consolidated entities operating outside of the U.S. is generally the currency of the primary economic environment in which the entity primarily generates and expends cash. The Company translates the financial statements of the consolidated entities whose functional currency is not the U.S. dollar into U.S. dollars. The Company translates the assets and liabilities at the exchange rate in effect as of the financial statement date, and translates income statement accounts using the approximate weighted average exchange rate for the period. The Company includes translation adjustments from foreign exchange and the effect of exchange rate changes on intercompany transactions of a long-term investment nature as a separate component of shareholders' equity (deficit). The Company presents foreign currency transaction gains and losses, and the effect of intercompany transactions of a short-term or trading nature, within other (gains) losses, net in the consolidated statements of income. For the year ended December 31, 2025, the foreign currency transaction losses were $0.1 million. For the years ended December 31, 2024 and 2023, the foreign currency transaction gains were $2.1 million and $0.5 million, respectively.

*Share-Based Compensation*

The Company has stock compensation plans pursuant to which it is authorized to grant share-based awards, including restricted stock, stock options, stock appreciation rights, and performance-based share awards, to officers, key employees, and non-employee directors with contractual terms that are set by the Compensation and Management Development Committee of the Board of Directors.

*Stock Options -* The Company recognizes compensation expense related to the fair value of these awards on a straight-line basis over the requisite service period for the share-based awards that ultimately vest. The fair value of the stock options is estimated on the grant date using the Black-Scholes options-pricing model.

*Restricted Stock Units ("RSUs") -* The Company recognizes compensation expense related to the fair value of the restricted stock awards on a straight-line basis over the requisite service period for the restricted stock awards that ultimately vest. The fair value of the grants is measured by the market price of the Company's common stock on the date of grant. The restricted stock awards generally vest ratably over the service period beginning on the first anniversary of the grant date. The

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restricted stock awards granted to retirement eligible non-employee directors are recognized over the shorter of the requisite service period or the length of time until retirement since the terms of the grant provide that awards will vest upon retirement.

*Performance Vested Restricted Stock Units ("PVRSUs") -* The Company has granted PVRSUs to certain employees. The Company grants three types of PVRSU awards: (i) PVRSUs with performance conditions based on internal performance metrics, (ii) PVRSUs with market conditions based on the Company's total shareholder return ("TSR") relative to a predetermined peer group, and (iii) PVRSUs with both performance and market conditions. The vesting of the PVRSU awards is contingent upon the Company achieving the internal performance and/or TSR targets over a specified period and the employees' continued employment over the service period. The performance and market conditions affect the number of shares that will ultimately vest.

The fair value of the PVRSUs with performance conditions based on internal performance metrics is measured by the market price of the Company's common stock on the date of the award grant. The Company recognizes compensation expense ratably over the requisite service period based on the Company's estimate of achieving the performance conditions.

The fair value of the PVRSUs with market conditions is estimated using a Monte Carlo simulation method as of the date of the award grant. The Company recognizes compensation expense ratably over the requisite service period regardless of whether the market conditions are achieved and the awards ultimately vest.

The fair value of the PVRSUs with both performance and market conditions is estimated using a Monte Carlo simulation as of the date of the award grant. The Company recognizes compensation expense ratably over the requisite service period based on the Company's estimate of achieving the performance conditions, with subsequent adjustments being made for the performance-based leveraging of any unvested PVRSUs, as necessary.

Over the life of the share-based award grant, the Company's estimate of the share-based compensation expense for the share-based awards with performance and/or service requirements will be adjusted so that compensation expense is recognized only for the share-based awards that will ultimately vest. The expected forfeiture rate is calculated based on the number of shares that have historically been forfeited due to termination within one year of the grant date.

*Leases*

The Company determines if an arrangement is a lease, and the classification as either an operating lease or a financing lease, at lease inception. Operating leases are included in operating lease right-of-use assets, accrued expenses and other current liabilities, and operating lease liabilities in our consolidated balance sheets. As of December 31, 2025 and 2024, the Company did not have any leases classified as a financing lease.

On the commencement date, operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The operating lease right-of-use assets are further offset by prepaid rent, lease incentives, and initial direct costs incurred. When a lease agreement does not provide an implicit rate, the Company utilizes its incremental borrowing rate based on the information available at the commencement date in determining the present value of the future minimum lease payments.

Lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments include certain index-based changes in rent, certain non-lease components (such as maintenance and other services provided by the lessor), and other charges included in the lease. Variable lease payments are excluded from the future minimum lease payments and expensed as incurred.

The Company has made an election to not separate the lease and the non-lease components for all classes of underlying assets in which it is the lessee. In addition, the Company has made an election to not recognize short-term leases with an initial term of 12 months or less in the consolidated balance sheets. These short-term leases are expensed on a straight-line basis over the lease term.

*Non-Qualified Retirement, Savings, and Investment Plans*

The Company has an Executive Deferred Compensation Plan ("EDCP") and a Non-Qualified Retirement Savings and Investment Plan ("Non-Qualified Plan") (together, the "Deferred Compensation Plan"). Under the EDCP, certain executive officers may defer a portion of their salary into an irrevocable trust and invest these amounts in a selection of available diversified investment options. The Non-Qualified Plan allows certain employees who do not participate in the EDCP to defer a portion of their salary and invest these amounts in a selection of available diversified investment options. The long-term deferred compensation and retirement plan liabilities related to the deferrals and the credited investment returns under the Deferred Compensation Plan are presented in deferred compensation and retirement plan obligations in the consolidated balance sheets. The corresponding long-term deferred compensation and retirement plan assets are presented in investments for employee benefit plans, at fair value in the consolidated balance sheets. Compensation expense or benefit is recognized in

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selling, general and administrative expenses in the consolidated statements of income based on the change in the deferred compensation and retirement plan obligations related to the earnings credited to the participants as well as the changes in the fair value of the diversified investments.

*Business Combinations*

The Company allocates the purchase price of an acquisition to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company recognizes goodwill as the amount by which the purchase price of an acquired entity exceeds the fair values assigned to the assets acquired and liabilities assumed. For a business combination achieved in stages, in which there is a change in ownership interest and control is obtained when there is a previously held equity interest, a gain or loss from remeasurement of the previously held equity interest to fair value is recognized in the period that control was obtained.

*Recently Adopted & Issued Accounting Standards*

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, *Improvements to Income Tax Disclosures* ("ASU 2023-09"). ASU 2023-09 is designed to provide additional information to financial statement users in regards to how an entity's operations, risks, and planning affect its tax rate, opportunities, and future cash flows. ASU 2023-09 is effective for the annual reporting period beginning after December 15, 2024. The Company adopted ASU 2023-09 on a prospective basis effective December 31, 2025. The adoption of this standard did not have an impact on the Company's consolidated financial statements, but it did require enhanced income tax disclosures in the notes to the consolidated financial statements. Refer to Note 11 for more information.

In November 2024, the FASB issued ASU 2024-03, *Disaggregation of Income Statement Expenses* ("ASU 2024-03"). ASU 2024-03 requires public entities to provide detailed disclosure of the income statement expenses in the footnotes to the consolidated financial statements. ASU 2024-03 does not require any changes to the expense captions on the face of the consolidated income statement. ASU 2024-03 is effective for the annual reporting period beginning after December 15, 2026 and for the interim periods within the annual reporting period beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact that ASU 2024-03 will have on the Company's consolidated financial statements.

**2. Revenue**

*Contract Liabilities*

Contract liabilities relate to (i) advance consideration received related to services considered to be a part of the brand intellectual property performance obligation, such as initial franchise fees that are paid when a franchise agreement is executed and system implementation fees that are paid at the time of installation, and (ii) amounts received when loyalty points are issued but the associated revenue has not yet been recognized because the related loyalty points have not been redeemed.

Deferred revenues from initial franchise fees are typically recognized over a ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby the remaining deferred revenue amounts are recognized to revenue in the period of termination. As of December 31, 2025 and 2024, deferred revenues from initial franchise fees were $103.0 million and $111.2 million, respectively. Loyalty points are typically redeemed within three years of issuance. As of December 31, 2025 and 2024, deferred revenues from the loyalty program were $114.9 million and $110.4 million, respectively.

The following table summarizes the significant changes in the contract liabilities balances during the year ended December 31, 2025:

---

| | |
|:---|:---|
| **(in thousands)** | |
| Balance as of December 31, 2024 | $**216697** |
| Increases to the contract liability balance due to cash received | **153031** |
| Revenue recognized in the period | **(149388)** |
| Balance as of December 31, 2025 | $**220340** |

---

*Remaining Performance Obligations*

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $220.3 million as of December 31, 2025. This amount represents the fixed transaction price that will be recognized as revenue in future periods, which is presented as current and non-current deferred revenue in the consolidated balance sheets.

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Based on the practical expedient elections permitted by ASU 2014-09, *Revenue From Contracts with Customers (Topic 606)* and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and SaaS agreements), (ii) variable consideration for which the Company recognizes revenue at the amount to which it has the right to invoice for the services performed, or (iii) contracts with an expected original duration of one year or less.

*Capitalized Franchise Agreement Costs*

Sales commissions earned by Company personnel upon execution of a franchise agreement ("franchise sales commissions") meet the requirement to be capitalized as an incremental cost of obtaining a contract with a customer. The capitalized franchise sales commissions are amortized on a straight-line basis over the estimated benefit period of the arrangement, unless the franchise agreement is terminated and the hotel exits the system whereby the remaining capitalized amounts will be expensed in the period of termination. The estimated benefit period is the Company's estimate of the duration a hotel will remain in the Choice system. As of December 31, 2025 and 2024, the capitalized franchise sales commissions were $69.0 million and $59.5 million, respectively, which are presented within other assets in the consolidated balance sheets. For the years ended December 31, 2025, 2024, and 2023, amortization expense and impairment charges were $13.2 million, $10.2 million, and $13.1 million, respectively, which are presented within selling, general and administrative expenses in the consolidated statements of income.

The Company makes certain payments to customers as an incentive to enter into new franchise agreements ("franchise agreement acquisition costs"). These payments are recognized as an adjustment to the transaction price and capitalized as an intangible asset in the consolidated balance sheets. The franchise agreement acquisition cost intangible assets are amortized on a straight-line basis over the estimated benefit period of the arrangement as a reduction to franchise and management fees and revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income. For the years ended December 31, 2025 and 2023, the net impairments from adverse franchise agreement activity, including terminations and significant delinquencies in invoice payments, were $1.1 million and $7.3 million, respectively, which are presented within selling, general and administrative expenses and reimbursable expenses from franchised and managed properties in the consolidated statements of income. For the year ended December 31, 2024, the net recoveries from adverse franchise agreement activity, including terminations and significant delinquencies in invoice payments, were $0.4 million, which is presented within selling, general and administrative expenses and reimbursable expenses from franchised and managed properties in the consolidated statements of income.

**3. Receivables and Allowance for Credit Losses**

*<u>Notes Receivable</u>*

The Company has provided financing in the form of notes receivable loans to franchisees in order to support the development of hotel properties in strategic markets. The Company's credit quality indicator is the level of security in the note receivable.

The following table summarizes the composition of the notes receivable balances by credit quality indicator and the allowance for credit losses:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Senior | $**98257** | $94963 |
| Subordinated | **13356** | 15433 |
| Unsecured | **4044** | 5118 |
| Total notes receivable | **115657** | 115514 |
| Less: allowance for credit losses | **8481** | 7331 |
| Total notes receivable, net of allowance for credit losses | $**107176** | $108183 |
| Current portion, net of allowance for credit losses | $**94686** | $75501 |
| Long-term portion, net of allowance for credit losses | $**12490** | $32682 |

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The following table summarizes the amortized cost basis of the notes receivable by the year of origination and credit quality indicator:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Total** |
| Senior | $1713 | $40832 | $— | $— | $— | $55712 | $98257 |
| Subordinated | 1501 |  | 3503 |  |  | 8352 | 13356 |
| Unsecured | 386 | 125 |  |  | 771 | 2762 | 4044 |
| Total notes receivable | $3600 | $40957 | $3503 | $— | $771 | $66826 | $115657 |

---

The following table summarizes the activity related to the Company's notes receivable allowance for credit losses:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Beginning balance | $**7331** | $8616 |
| Provision (reversal) for credit losses | **1150** | (609) |
| Recoveries | **—** | (676) |
| Ending balance | $**8481** | $7331 |

---

During the year ended December 31, 2024, the recoveries were primarily associated with cash collections pursuant to a settlement agreement with a borrower.

As of December 31, 2025 and December 31, 2024, three and one note receivable loans, respectively, with senior credit quality indicators met the definition of collateral-dependent and are collateralized by the membership interests in the borrowing entities, the associated land parcel, or the operating hotel. The Company used both a market approach that uses quoted market prices and an income approach that uses discounted cash flows to value the underlying collateral. The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections. These nonrecurring fair value measurements are classified as Level 3 in the fair value measurement hierarchy because they are unobservable inputs which are significant to the overall fair value. Based on the Company's analysis, the fair value of the collateral secures substantially all of the carrying value of the respective note receivable loans. The allowance for credit losses attributable to the collateral-dependent note receivable loans were $4.6 million and $2.2 million as of December 31, 2025 and 2024, respectively.

The following table summarizes the past due balances by credit quality indicator of the notes receivable:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in thousands)** | **1-30 days<br>Past Due** | **31-89 days<br>Past Due** | **> 90 days<br>Past Due** | **Total<br>Past Due** | **Current** | **Total Notes Receivable** |
| **As of December 31, 2025** | | | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior | $**—** | $**—** | $**42900** | $**42900** | $**55357** | $**98257** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subordinated | **—** | **—** | **—** | **—** | **13356** | **13356** |
| &nbsp;&nbsp;&nbsp;&nbsp; Unsecured | **—** | **—** | **404** | **404** | **3640** | **4044** |
|  | $**—** | $**—** | $**43304** | $**43304** | $**72353** | $**115657** |
| **As of December 31, 2024** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior | $— | $— | $15200 | $15200 | $79763 | $94963 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subordinated |  |  | 2264 | 2264 | 13169 | 15433 |
| &nbsp;&nbsp;&nbsp;&nbsp; Unsecured |  |  | 784 | 784 | 4334 | 5118 |
|  | $— | $— | $18248 | $18248 | $97266 | $115514 |

---

The amortized cost basis of the notes receivable in a non-accrual status was $42.9 million and $17.5 million as of December 31, 2025 and 2024, respectively.

*Variable Interest through Notes Receivable*

The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $103.2 million and $103.1 million as of December 31, 2025 and 2024, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs"). For the collateral-dependent loans, the Company has no exposure to the borrowing VIE beyond the respective note receivable and the limited commitments which are addressed in Note 16.

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*Transactions with Unconsolidated Affiliates* 

The Company has extended loans to various unconsolidated affiliates or members of our unconsolidated affiliates. The Company had a total principal balance on these loans of $65.3 million and $66.2 million as of December 31, 2025 and December 31, 2024, respectively.

*<u>Accounts Receivable</u>*

Accounts receivable consists primarily of franchise and related fees due from the hotel franchisees and are recorded at the invoiced amount.

During the year ended December 31, 2025, the Company recognized provisions for credit losses on accounts receivable of $20.2 million in selling, general and administrative expenses, and $15.0 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income. During the year ended December 31, 2024, the Company recognized provisions for credit losses on accounts receivable of $11.0 million in selling, general and administrative expenses, and $9.7 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income. For the years ended December 31, 2025 and 2024, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $29.6 million and $14.4 million, respectively.

**4. Property and Equipment** 

The components of property and equipment were the following:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Land and land improvements | $**67451** | $51045 |
| Construction in progress and software under development | **88125** | 151756 |
| Computer equipment and software | **114031** | 105196 |
| Buildings and leasehold improvements | **462543** | 354689 |
| Furniture, fixtures, vehicles and equipment | **79254** | 67562 |
| Property and equipment | **811404** | 730248 |
| Less: Accumulated depreciation and amortization | **(162113)** | (125903) |
| Property and equipment, net | $**649291** | $604345 |

---

For the years ended December 31, 2025, 2024, and 2023, the Company recognized depreciation and amortization expense of $35.3 million, $31.3 million, and $25.2 million, respectively, in depreciation and amortization in the consolidated statements of income. Additionally, for the years ended December 31, 2025, 2024, and 2023, the Company recognized depreciation and amortization expense of $18.4 million, $17.4 million, and $27.9 million, respectively, in reimbursable expenses from franchised and managed properties in the consolidated statements of income.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization of capitalized software development costs of $27.6 million, $22.8 million, and $30.3 million, respectively, which are included in the total depreciation and amortization expense amounts that are disclosed in the paragraph above. As of December 31, 2025 and 2024, unamortized capitalized software development costs were $65.1 million and $65.3 million, respectively.

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**5. Goodwill and Impairment of Assets**

***Goodwill***

The following table summarizes the carrying amount of the Company's goodwill:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Goodwill, excluding goodwill arising from the Choice Hotels Canada acquisition | $**227765** | $227765 |
| Goodwill arising from the Choice Hotels Canada acquisition | **86194** |  |
| Effect of foreign currency translation | **(623)** |  |
| Total goodwill, gross carrying amount | **313336** | 227765 |
| Accumulated impairment losses | **(7578)** | (7578) |
| Goodwill, net carrying amount | $**305758** | $220187 |

---

As of December 31, 2025 and 2024, goodwill is entirely attributable to the Hotel Franchising reporting unit. The Company assessed the qualitative factors attributable to the Hotel Franchising reporting unit and determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount. The Hotel Franchising reporting unit is included in the Hotel Franchising & Management reportable segment in Note 15.

***Long-lived Asset Group Impairments***

*Legacy Radisson Corporate Office Lease*

On October 12, 2023, the Company executed an agreement to sublease the legacy Radisson corporate office space in Minneapolis, Minnesota. As a result of the intended change of use, the Company determined the assets associated with the legacy Radisson corporate office space represent their own long-lived asset group, inclusive of the head lease right-of-use asset and leasehold improvements, with a carrying value of $9.5 million. The legacy Radisson corporate office space long-lived asset group was determined to be impaired due to the carrying value exceeding its fair value, which resulted in the recognition of a $3.4 million impairment loss, which is presented within impairments of long-lived assets in the consolidated statements of income and the Corporate & Other segment in Note 15. This nonrecurring fair value measurement, which is based on a discounted cash flows analysis, is classified as Level 3 in the fair value measurement hierarchy because there are unobservable inputs which are significant to the overall fair value.

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**6. Intangible Assets**

The components of the Company's intangible assets were the following:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
| **(in thousands)** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Value** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Value** |
| Franchise Rights <sup>(1)</sup> | $**352710** | $**90059** | $**262651** | $278956 | $67620 | $211336 |
| Reacquired Territory Rights <sup>(2)</sup> | **75971** | **1000** | **74971** |  |  |  |
| Franchise Agreement Acquisition Costs <sup>(3)</sup> | **644997** | **159630** | **485367** | 548544 | 128932 | 419612 |
| Trademarks & Other <sup>(4)</sup> | **10603** | **4569** | **6034** | 12444 | 6414 | 6030 |
| Capitalized SaaS Licenses <sup>(5)</sup> | **1959** | **1317** | **642** | 6392 | 6071 | 321 |
| Total amortizing intangible assets | **1086240** | **256575** | **829665** | 846336 | 209037 | 637299 |
| Trademarks & Other (non-amortizing) <sup>(6)</sup> | **252821** | **—** | **252821** | 246714 |  | 246714 |
| Total intangible assets | $**1339061** | $**256575** | $**1082486** | $1093050 | $209037 | $884013 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the purchase price assigned to long-term franchise contracts. The unamortized balance relates primarily to the franchise rights established from the Radisson Hotels Americas acquisition, the Choice Hotels Canada acquisition, as well as the active WoodSpring franchise rights since the acquisition. The franchise rights are being amortized over useful lives ranging from 12 to 15 years on a straight-line basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents the reacquired territory rights for the use of certain Choice brands within Canada. The reacquired territory rights are being amortized on a straight-line basis over a useful life of 38 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Represents certain payments to customers as an incentive to enter into new franchise agreements, which are amortized as a reduction to franchise and management fees and revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income over useful lives generally ranging from 10 to 30 years on a straight-line basis commencing at hotel opening. The gross and accumulated amortization amounts are written off upon full amortization recognition, including the termination of an associated franchise agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Represents definite-lived trademarks and other amortizing assets, including management agreements, which are generally amortized on a straight-line basis over a period of 10 years to 30 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Represents software licenses that have been capitalized under a SaaS agreement, which are generally amortized on a straight-line basis over an average period of 3 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Represents the purchase price assigned to the Radisson, WoodSpring, and Suburban trademarks and other intellectual property that were recognized at the time of their respective acquisitions. The trademarks and other intellectual property are non-amortizing assets because they are expected to generate future cash flows for an indefinite period of time.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization on the amortizing intangible assets of $24.4 million, $20.7 million, and $19.8 million, respectively, in depreciation and amortization in the consolidated statements of income and $1.2 million, $1.5 million, and $2.8 million, respectively, in reimbursable expenses from franchised and managed properties in the consolidated statements of income. Additionally, for the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization on the amortizing intangible assets of $20.6 million, $16.2 million, and $11.6 million, respectively, as a reduction to franchise and management fees in the consolidated statements of income and $12.1 million, $12.5 million, and $8.3 million, respectively, as a reduction to revenue for reimbursable costs from franchised and managed properties in the consolidated statements of income.

The estimated annual amortization on the amortizing intangible assets for each of the next five years is as follows:

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| | |
|:---|:---|
| **(in thousands)** | |
| 2026 | $63758 |
| 2027 | $62193 |
| 2028 | $60689 |
| 2029 | $59477 |
| 2030 | $53910 |

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**7. Investments in Affiliates**

The Company has equity method investments in affiliates primarily related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels and Everhome Suites in strategic markets.

As of December 31, 2025 and 2024, the Company had total investments in affiliates in the consolidated balance sheets of $135.0 million and $117.0 million, respectively, which included investments in affiliates that represent VIEs of $134.4 million and $104.2 million, respectively. The Company has determined that it is not the primary beneficiary of any of these VIEs, however the Company does exercise significant influence through its equity ownership and as a result, the investments in these affiliates are accounted for under the equity method of accounting. During the years ended December 31, 2025, 2024, and 2023,

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the Company recognized losses of $16.1 million, gains of $6.9 million, and losses of $3.4 million, respectively, from these investments that represent VIEs. The Company's maximum exposure to losses related to its investments in the VIEs is limited to the total of its respective equity investment as well as certain limited payment guaranties, which are described in Note 16 to these consolidated financial statements.

The Company has entered into franchise agreements with certain of its unconsolidated affiliates. Pursuant to these franchise agreements, the Company recognized royalty fees and marketing and reservation fees of approximately $19.6 million, $34.5 million, and $30.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

On July 10, 2025 the Company entered into a joint venture agreement to develop and operate Everhome Suites in certain strategic markets (the "Joint Venture"). The Company contributed $71.6 million in cash to the Joint Venture in exchange for an equity ownership interest. The Company concluded that the Joint Venture represents a VIE. The Company determined that it is not the primary beneficiary of the VIE, however, the Company does exercise significant influence through its equity ownership and as a result, the Company's investment in the Joint Venture is accounted for under the equity method of accounting and reported within investments in affiliates in the consolidated balance sheets.

Subsequent to the formation of the Joint Venture, the following transactions were completed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Joint Venture entered into a loan facility for up to $500 million. In connection with the loan facility, the Company has provided a limited payment guarantee, which applies to all hotel projects funded by the loan facility, with the applicable guaranteed amount being determined on a hotel project by hotel project basis. The Company's obligation under the limited payment guarantee with respect to any hotel project is effective upon the earlier of (a) the hotel's opening date or (b) 18 months after the date on which construction first started for the hotel. The maximum exposure to losses related to this limited payment guarantee is described in Note 16 to these consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company sold four wholly-owned Everhome Suites hotels under construction to the Joint Venture for an aggregate sale price of $52.0 million, resulting in a gain of $0.7 million which is reported within gain on sale of assets in the consolidated statements of income. Prior to the sale, the four wholly-owned Everhome Suites hotels were reported within property and equipment in the consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Seven of the Company's unconsolidated affiliates, which the Company previously accounted for under the equity method of accounting, contributed their underlying assets to the Joint Venture. Prior to the transaction, the seven unconsolidated affiliates had an aggregate investment balance of $42.1 million, which was reported within investments in affiliates in the consolidated balance sheets.

During the year ended December 31, 2024, the Company received distributions from the sale of affiliates of $15.9 million and recognized net gains of $7.2 million, which was recognized in equity in net gain of affiliates in the consolidated statements of income. During the year ended December 31, 2023, the Company received distributions from the sale of affiliates of $0.9 million which resulted in no net gains (losses).

During the years ended December 31, 2025, 2024, and 2023, the Company recognized no impairment charges related to its equity method investments.

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The Company's ownership interests in its affiliates were as follows:

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| | | |
|:---|:---|:---|
| | **Ownership Interest** | **Ownership Interest** |
| | **December 31, 2025** | **December 31, 2024** |
| Choice Hotels Canada, Inc. <sup>(1) (2)</sup> | **— %** | 50% |
| Main Street WP Hotel Associates, LLC | **50%** | 50% |
| CS Hotel West Orange, LLC | **50%** | 50% |
| 926 James M. Wood Boulevard, LLC | **75%** | 75% |
| EH Glendale JV, LLC | **80%** | 80% |
| CS Lakeside Santa Clara LLC | **50%** | 50% |
| BL 219 Holdco, LP | **50%** | 50% |
| Integrated 32 West Randolph, LLC | **20%** | 20% |
| EH Nampa JV LLC | **80%** | 80% |
| Radisson Hotel La Crosse <sup>(1)</sup> | **14%** | 14% |
| CH East Avenue, LLC | **65%** | 65% |
| EH Cheyenne JV, LLC | **80%** | 80% |
| EH Clarksville JV, LLC | **80%** | 80% |
| EH Waco JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH Amarillo JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH Yuma JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH El Paso JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH Brownsville JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH Wichita JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH Salem JV, LLC <sup>(3)</sup> | **— %** | 80% |
| EH Facility JV, LLC <sup>(3)</sup> | **86%** | —% |

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(1) Non-VIE investments.

(2) During the year ended December 31, 2025, the Company completed the acquisition of the remaining 50% of the outstanding shares of Choice Hotels Canada, Inc. As a result of the acquisition, Choice Hotels Canada, Inc. is now a wholly-owned and consolidated subsidiary of the Company. Refer to Note 17 for additional information.

(3) During the year ended December 31, 2025, seven of the Company's unconsolidated affiliates contributed their underlying assets to EH Facility JV, LLC.

The following tables present summarized financial information for all of the unconsolidated joint ventures in which the Company holds an investment in affiliate that is accounted for under the equity method of accounting:

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** | **2023** |
| Revenues | $**73113** | $65732 | $65634 |
| Operating income | $**13091** | $14199 | $12504 |
| (Loss) income before income taxes | $**(13990)** | $(1203) | $314 |
| Net loss | $**(14443)** | $(3488) | $(1255) |

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| | | |
|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Current assets | $**27787** | $71737 |
| Non-current assets | **502562** | 412269 |
| Total assets | $**530349** | $484006 |
| Current liabilities | $**30988** | $84966 |
| Non-current liabilities | **352594** | 257130 |
| Total liabilities | $**383582** | $342096 |

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**8. Accrued Expenses and Other Current Liabilities** 

Accrued expenses and other current liabilities consisted of the following:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Accrued compensation and benefits | $**47451** | $55806 |
| Accrued interest | **24761** | 27333 |
| Dividends payable | **13542** | 13888 |
| Income taxes payable | **862** | 10405 |
| Current operating lease liabilities | **8364** | 5367 |
| Other liabilities | **30302** | 23930 |
| Total accrued expenses and other current liabilities | $**125282** | $136729 |

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**9. Debt** 

Debt consisted of the following:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2025** | **2024** |
| | **(in thousands)** | **(in thousands)** |
| $400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88%, less a discount and deferred issuance costs of $2.4 million and $3.0 million at December 31, 2025 and December 31, 2024, respectively | $**397643** | $397042 |
| $450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86%, less a discount and deferred issuance costs of $3.1 million and $3.7 million at December 31, 2025 and December 31, 2024, respectively | **446910** | 446300 |
| $600 million senior unsecured notes due 2034 ("2024 Senior Notes") with an effective interest rate of 6.11%, less a discount and deferred issuance costs of $10.1 million and $11.2 million at December 31, 2025 and December 31, 2024, respectively | **589936** | 588764 |
| $1 billion senior unsecured revolving credit facility with an effective interest rate of 5.22%, less deferred issuance costs of $2.8 million and $3.6 million at December 31, 2025 and December 31, 2024, respectively | **469783** | 336420 |
| Economic development loans with an effective interest rate of 3.00% at December 31, 2025 | **1850** |  |
| Total long-term debt | $**1906122** | $1768526 |

---

As of December 31, 2025, the scheduled principal maturities of debt, net of unamortized discounts, premiums, and deferred issuance costs, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in thousands)** | **Senior Notes** | **Revolving Credit<br>Facility** | **Other Notes Payable** | **Total** |
| 2026 | $— | $— | $— | $— |
| 2027 |  |  |  |  |
| 2028 |  |  |  |  |
| 2029 | 397643 | 469783 |  | 867426 |
| 2030 |  |  |  |  |
| Thereafter | 1036846 |  | 1850 | 1038696 |
| Total payments | $1434489 | $469783 | $1850 | $1906122 |

---

**10. Fair Value Measurements**

The Company estimates the fair value of its financial instruments utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The following summarizes the three levels of inputs, as well as the assets that the Company values using those levels of inputs on a recurring basis.

**Level 1 -** Quoted prices in active markets for identical assets and liabilities. The Company's Level 1 assets consist of mutual funds held in the Company's Deferred Compensation Plan.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**Level 2 -** Observable inputs, other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable. The Company's Level 2 assets consist of money market funds held in the Company's Deferred Compensation Plan.

**Level 3 -** Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument. The Company does not currently have any assets recorded at fair value on a recurring basis whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the years ended December 31, 2025 and 2024.

The Company recognized the following assets at fair value on a recurring basis in the consolidated balance sheets:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value Measurements at Reporting Date Using** | **Fair Value Measurements at Reporting Date Using** | **Fair Value Measurements at Reporting Date Using** | **Fair Value Measurements at Reporting Date Using** |
| **(in thousands)** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **As of December 31, 2025** | | | | |
| Mutual funds<sup>(1)</sup> | $**47713** | $**47713** | $**—** | $**—** |
| Money market funds<sup>(1)</sup> | **4281** | **—** | **4281** | **—** |
| Total | $**51994** | $**47713** | $**4281** | $**—** |
| **As of December 31, 2024** |  |  |  |  |
| Mutual funds<sup>(1)</sup> | $43887 | $43887 | $— | $— |
| Money market funds<sup>(1)</sup> | 5439 |  | 5439 |  |
| Total | $49326 | $43887 | $5439 | $— |

---

(1)The current assets at fair value noted above are presented in prepaid expenses and other current assets in the consolidated balance sheets. The long-term assets at fair value noted above are presented in investments for employee benefit plans, at fair value in the consolidated balance sheets.

*Other Financial Instruments Disclosure*

The Company believes that the fair values of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rate on the senior unsecured revolving credit facility adjusts frequently based on current market interest rates; therefore, the Company believes the carrying amount approximates the fair value.

The fair values of the Company's senior unsecured notes are classified as Level 2 because the significant inputs are observable in an active market. Refer to Note 9 for additional information on debt. As of December 31, 2025 and 2024, the carrying amounts and the fair values were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| **(in thousands)** | **Carrying Amount** | **Fair Value** | **Carrying Amount** | **Fair Value** |
| 2019 Senior Notes Due 2029 | $**397643** | $**389612** | $397042 | $371600 |
| 2020 Senior Notes Due 2031 | $**446910** | $**428963** | $446300 | $405351 |
| 2024 Senior Notes Due 2034 | $**589936** | $**612612** | $588764 | $601836 |

---

The fair value estimates are determined at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. The settlement of such fair value amounts may not be possible or a prudent management decision.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**11. Income Taxes**

The Company's income before income taxes, classified by source of income, was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** | **2023** |
| U.S. | $**324611** | $370395 | $303337 |
| Outside the U.S. | **132280** | 25250 | 33619 |
| Income before income taxes | $**456891** | $395645 | $336956 |

---

The provision for income taxes, classified by the timing and the location of payment, was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** | **2023** |
| Current tax expense |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal | $**45262** | $89716 | $60493 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State | **10890** | 21518 | 16890 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign | **4568** | 2609 | 1593 |
| Deferred tax expense (benefit) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal | **17330** | (18378) | (2022) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State | **4343** | (2908) | (1874) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign | **4552** | 3423 | 3369 |
| Income tax expense | $**86945** | $95980 | $78449 |

---

The net deferred tax assets were as follows:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Deferred tax assets: |  |  |
| Accrued compensation | $**21571** | $20958 |
| Deferred revenue | **36209** | 40946 |
| Receivable, net | **13888** | 12345 |
| Tax credits | **34615** | 24663 |
| Operating lease liabilities | **27872** | 28455 |
| Partnership interests | **2896** | 5130 |
| Capitalized research and experimental expenditures | **35253** | 44946 |
| Foreign net operating losses | **7651** | 7870 |
| Non-U.S. intellectual property | **7555** | 11333 |
| Other | **5015** | 7235 |
| Total gross deferred tax assets | **192525** | 203881 |
| Less: Valuation allowance | **(33542)** | (29660) |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax assets | $**158983** | $174221 |
| Deferred tax liabilities: |  |  |
| Property, equipment and intangible assets | $**(87465)** | $(42895) |
| Operating lease ROU assets | **(18601)** | (20016) |
| Other | **(2849)** | (3002) |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred tax liabilities | **(108915)** | (65913) |
| Net deferred tax assets | $**50068** | $108308 |

---

The Company assesses all positive and negative evidence to estimate whether sufficient future taxable income will be generated to use its deferred tax assets. Based on this evaluation, the Company recorded a net change to its valuation allowance of $3.9 million due to state tax credits and foreign NOLs.

------

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

The Company has $28.0 million of state income tax credit carryforwards as of December 31, 2025. It is unlikely that the Company will realize these benefits. Accordingly, the Company has provided a full valuation allowance against these carryforwards.

As of December 31, 2025, the Company had gross foreign net operating losses ("NOLs") of $28.3 million, all of which have indefinite carryforward lives. The Company has recorded a tax-effected valuation allowance of $2.4 million for these NOLs, primarily related to Australia and India. In addition, the Company has a Dutch deferred tax asset of $7.6 million, for which it has recorded a valuation allowance of $3.0 million. The Dutch valuation allowance did not change during the year ended December 31, 2025.

The following table presents a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate for continuing operations, in accordance with ASU 2023-09 for the year ended December 31, 2025. Refer to Note 1 for more information on the adoption of ASU 2023-09.

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025** | **2025** |
| **(in thousands, except percentages)** | **Amount** | **Percent** |
| U.S. federal statutory tax rate | $**95989** | **21.0%** |
| State and local income taxes, net of federal income tax effect <sup>(1)</sup> | **11996** | **2.6** |
| Foreign tax effects: |  |  |
| &nbsp;&nbsp;Canada: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal statutory tax rate difference between Canada and U.S. | **(6137)** | **(1.3)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-taxable gain | **(15026)** | **(3.3)** |
| &nbsp;&nbsp;Netherlands | **1169** | **0.3** |
| &nbsp;&nbsp;Other foreign jurisdictions <sup>(2)</sup> | **2130** | **0.4** |
| Effects of cross-border tax laws | **(903)** | **(0.2)** |
| Tax credits |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research & development tax credits | **(4861)** | **(1.1)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | **(3107)** | **(0.7)** |
| Nontaxable or nondeductible items: |  |  |
| &nbsp;&nbsp;Expenses related to compensation, net | **5271** | **1.2** |
| &nbsp;&nbsp;Other | **927** | **0.2** |
| Changes in unrecognized tax benefits | **(455)** | **(0.1)** |
| Other | **(48)** | **—** |
| Effective income tax rate | $**86945** | **19.0%** |

---

<sup>(1)</sup> State taxes in Minnesota, California, New York, Illinois, Georgia, Florida, Tennessee, and Wisconsin made up the majority (greater than 50%) of the tax effect of this category.

<sup>(2)</sup> All other foreign jurisdictions do not exceed the 5% threshold at the jurisdiction level in total or for individual reconciling items of the same nature within each jurisdiction.

The Company's effective income tax rate from continuing operations was 19.0% for the year ended December 31, 2025.

The effective income tax rate for the year ended December 31, 2025 was lower than the U.S. federal income tax rate of 21.0% primarily due to the impact of a $100.0 million non-taxable gain from an acquisition of a joint venture and federal income tax credits, which were partially offset by the impact of state income taxes and tax expense related to compensation.

The following table presents a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate for continuing operations as previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09.

------

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2024** | **2023** |
| Statutory U.S. federal income tax rate | 21.0% | 21.0% |
| State income taxes, net of federal tax benefit | 3.5% | 3.2% |
| Expenses related to foreign operations | 0.7% | 0.3% |
| Expenses related to compensation, net | 1.3% | 1.0% |
| Unrecognized tax positions | (0.8)% | 0.5% |
| Tax credits | (2.4)% | (2.4)% |
| Valuation allowance | 0.6% | 0.6% |
| Other | 0.4% | (0.9)% |
| Effective income tax rate | 24.3% | 23.3% |

---

The Company's effective income tax rates from continuing operations were 24.3% and 23.3% for the years ended December 31, 2024 and 2023, respectively.

The effective income tax rates for the years ended December 31, 2024 and 2023 were higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes and tax expense related to compensation, which were partially offset by federal income tax credits.

For the years ended December 31, 2025, 2024, and 2023, the Company's gross unrecognized tax benefits totaled $5.8 million, $6.9 million, and $13.4 million, respectively. After considering the deferred income tax accounting impact, it is expected that approximately $3.5 million of the total as of December 31, 2025 would reduce the effective income tax rate if resolved in the Company's favor.

The following table presents a reconciliation of the beginning and ending amounts of the unrecognized tax benefits:

---

| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **2025** | **2024** | **2023** |
| Balance, January 1 | $**6914** | $13434 | $11876 |
| Changes for tax positions of prior years | **91** | (776) | 2338 |
| Increases for tax positions related to the current year | **1400** | 1516 | 1670 |
| Settlements and lapsing of statutes of limitations | **(2573)** | (7260) | (2450) |
| Balance, December 31 | $**5832** | $6914 | $13434 |

---

The Company files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. The Company's federal income tax returns for the 2022, 2023, 2024, and 2025 tax years are subject to examination by the Internal Revenue Service.

The Company's policy is to recognize interest and penalties related to income tax matters in the provision for income taxes. The Company did not incur any material interest or penalties during the years ended December 31, 2025, 2024, and 2023. The Company had no accrued interest and penalties as of December 31, 2025. The Company had $0.3 million of accrued interest and penalties as of December 31, 2024.

**12. Share-Based Compensation and Capital Stock**

*Share-Based Compensation*

The Company has stock compensation plans pursuant to which it is authorized to grant share-based awards, including restricted stock, stock options, stock appreciation rights, and performance-based share awards, to officers, key employees, and non-employee directors with contractual terms that are set by the Compensation and Management Development Committee of the Board of Directors. Approximately 1.9 million shares of the Company's common stock remain available for grant as of December 31, 2025. The Company's policy allows the issuance of new common stock shares or treasury shares to satisfy the share-based awards.

------

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

For the year ended December 31, 2025, the following table presents a summary of the share-based award activity:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** |
| | **Stock Options** | **Stock Options** | **Stock Options** | **Restricted Stock** | **Restricted Stock** | **Performance Vested<br>Restricted Stock Units** | **Performance Vested<br>Restricted Stock Units** |
| | **Options** | **Weighted Average Exercise Price** | **Weighted<br>Average<br>Remaining Contractual<br>Life** | **Shares** | **Weighted<br>Average Grant<br>Date Fair Value** | **Shares** | **Weighted<br>Average Grant<br>Date Fair Value** |
| Outstanding as of January 1, 2025 | **771641** | $**111.15** |  | **355405** | $**136.67** | **467521** | $**137.74** |
| Granted | **—** | **—** |  | **65223** | **132.64** | **148709** | **150.77** |
| Performance-based leveraging\* | **—** | **—** |  | **—** | **—** | **(41012)** | **125.90** |
| Exercised/vested | **(62025)** | **107.71** |  | **(65961)** | **129.32** | **(116107)** | **151.76** |
| Expired | **(12850)** | **135.92** |  | **—** | **—** | **—** | **—** |
| Forfeited | **(1683)** | **137.55** |  | **(11502)** | **125.14** | **(14300)** | **146.55** |
| Outstanding as of December 31, 2025 | **695083** | $**110.98** | **5.2 years** | **343165** | $**138.02** | **444811** | $**138.89** |
| Options exercisable as of December 31, 2025 | **560223** | $**107.84** | **4.7 years** |  |  |  |  |

---

\* Any revisions to the outstanding PVRSUs during the year ended December 31, 2025 are based on the Company's performance relative to the targeted performance conditions in the respective PVRSUs.

The components of the Company's share-based compensation expense were as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** | **2023** |
| Stock options | $**3946** | $5265 | $5816 |
| Restricted stock | **12785** | 12728 | 13774 |
| Performance vested restricted stock units | **21590** | 20447 | 20924 |
| Total share-based compensation expense | $**38321** | $38440 | $40514 |

---

The following table as of December 31, 2025 is a summary of the total unrecognized compensation expense related to the share-based awards that have not yet vested and the related weighted average remaining amortization periods over which the compensation expense will be recognized:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **Unrecognized Compensation Expense on Unvested Awards** | **Weighted Average Remaining Amortization Period** |
| Stock options | $1776 | 1.5 years |
| Restricted stock | 18507 | 1.9 years |
| Performance vested restricted stock units | 18749 | 1.7 years |
| Total | $39032 |  |

---

*Stock Options*

The following table is a summary of the activity related to the stock options:

---

| | | | |
|:---|:---|:---|:---|
| | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| | **2025** | **2024** | **2023** |
| Number of options granted | **—** | 78988 | 88733 |
| Fair value of options granted (in thousands) | $**—** | $3069 | $3779 |
| Total intrinsic value of stock options exercised (in thousands) | $**2356** | $12185 | $9170 |
| Total fair value of stock options vested (in thousands) | $**5108** | $5032 | $4857 |

---

The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. As of December 31, 2025, the aggregate intrinsic value of the stock options outstanding and exercisable was $1.5 million and $1.5 million, respectively.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

---

| | | | |
|:---|:---|:---|:---|
| | **2025** | **2024** | **2023** |
| Risk-free interest rate | **—** | 4.27% | 4.10% |
| Expected volatility | **—** | 31.34% | 30.90% |
| Expected life of stock option | **—** | 6.0 years | 6.0 years |
| Dividend yield | **—** | 1.03% | 0.90% |
| Requisite service period | **—** | 4 years | 4 years |
| Contractual life | **—** | 10 years | 10 years |
| Weighted average fair value of the stock options granted (per stock option) | $**—** | $38.85 | $42.59 |

---

The expected life of the stock options and the expected volatility are based on historical data which is believed to be indicative of future exercise patterns and volatility. The historical volatility is calculated based on a period that corresponds to the expected life of the stock option. The dividend yield and the risk-free interest rate are calculated on the grant date based on the then-current dividend rate and the risk-free interest rate for the period corresponding to the expected life of the stock option.

*Restricted Stock*

The following table is a summary of the activity related to the restricted stock:

---

| | | | |
|:---|:---|:---|:---|
| | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| | **2025** | **2024** | **2023** |
| Restricted shares granted | **65223** | 69249 | 65991 |
| Weighted average grant date fair value per share | $**132.64** | $115.57 | $123.65 |
| Aggregate grant date fair value (in thousands) | $**8651** | $8003 | $8160 |
| Restricted shares forfeited | **11502** | 16246 | 13202 |
| Vesting service period for the restricted shares granted | **9 - 48 months** | 9 - 48 months | 9 - 48 months |
| Fair value of the restricted shares vested (in thousands) | $**8790** | $6804 | $11134 |

---

*Performance Vested Restricted Stock Units*

The following table is a summary of the activity related to the PVRSUs:

---

| | | | |
|:---|:---|:---|:---|
| | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| | **2025** | **2024** | **2023** |
| PVRSUs granted at target | **148709** | 147943 | 110636 |
| Weighted average grant date fair value per share | $**150.77** | $115.04 | $128.71 |
| Aggregate grant date fair value (in thousands) | $**22421** | $17019 | $14240 |
| PVRSUs forfeited & expired | **14300** | 23710 | 16504 |
| Requisite service period | **9 - 48 months** | 9 - 48 months | 9 - 48 months |
| Fair value of PVRSUs vested (in thousands) | $**17621** | $15773 | $17413 |

---

During the year ended December 31, 2025, the Company granted PVRSUs with performance conditions, PVRSUs with market conditions, and PVRSUs with performance and market conditions, with requisite service periods between 9 months and 48 months and with award vesting ranges generally between 0% and 230% of the initial units granted.

*Share Repurchases and Redemptions*

During the years ended December 31, 2025, 2024, and 2023, the Company redeemed 71,386, 120,601, and 114,242 shares of common stock, respectively, at a total cost of approximately $9.9 million, $12.4 million, and $14.2 million, respectively, from employees to satisfy the stock option exercise price and the statutory minimum tax-withholding requirements related to exercising stock options and the vesting of performance vested restricted stock units and restricted stock grants. These redemptions were outside of the share repurchase program.

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

**13. Earnings Per Share**

The Company's shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities requiring the computation of basic earnings per share using the two-class method. The shares of restricted stock are both potential shares of common stock and participating securities so the Company calculates diluted earnings per share by using the more dilutive of the treasury stock method or the two-class method. The calculation of earnings per share for the net income available to common shareholders excludes the distribution of dividends and the undistributed earnings attributable to the participating securities from the numerator. The diluted earnings per share includes stock options, PVRSUs, and RSUs in the calculation of the weighted average shares of common stock outstanding.

The computation of basic and diluted earnings per share was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands, except per share amounts)** | **2025** | **2024** | **2023** |
| **Numerator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $**369946** | $299665 | $258507 |
| &nbsp;&nbsp;&nbsp;Income allocated to participating securities | **(1780)** | (1521) | (1379) |
| &nbsp;&nbsp;&nbsp;Net income available to common shareholders | $**368166** | $298144 | $257128 |
| **Denominator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average shares of common stock outstanding - basic | **46170** | 47653 | 50341 |
| **Basic earnings per share** | $**7.97** | $6.26 | $5.11 |
| **Numerator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $**369946** | $299665 | $258507 |
| &nbsp;&nbsp;&nbsp;Income allocated to participating securities | **(1780)** | (1521) | (1379) |
| &nbsp;&nbsp;&nbsp;Net income available to common shareholders | $**368166** | $298144 | $257128 |
| **Denominator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average shares of common stock outstanding - basic | **46170** | 47653 | 50341 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of stock options, PVRSUs, and RSUs | **410** | 425 | 359 |
| &nbsp;&nbsp;&nbsp;Weighted average shares of common stock outstanding - diluted | **46580** | 48078 | 50700 |
| **Diluted earnings per share** | $**7.90** | $6.20 | $5.07 |

---

The following securities have been excluded from the calculation of the diluted weighted average shares of common stock outstanding because the inclusion of these securities would have an anti-dilutive effect:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** | **2023** |
| Stock options | **202** | 147 | 232 |
| PVRSUs | **46** | 7 | 71 |

---

**14. Leases**

The Company has operating leases for office spaces, buildings, and equipment. The Company's leases, excluding the assumed ground lease discussed below, have remaining lease terms of two to nine years, some of which include options to extend the lease for up to ten years. Additionally, the Company has a ground lease on an owned hotel with a remaining lease term of 86.3 years.

The Company's lease costs were as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Operating lease cost | $**12130** | $11979 |
| Sublease income | **(937)** | (789) |
| Total lease cost | $**11193** | $11190 |

---

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

Other information related to the Company's lease arrangements were as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $**8602** | $6637 |
| ROU assets obtained in exchange for lease liabilities in non-cash transactions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease assets obtained in exchange for operating lease liabilities | $**427** | $4585 |
| Weighted-average remaining lease term | **31.6 years** | 31.7 years |
| Weighted-average discount rate | **5.09%** | 5.07% |

---

As of December 31, 2025, the future minimum lease payments were as follows:

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| | |
|:---|:---|
| **(in thousands)** | |
| 2026 | $**13071** |
| 2027 | **13697** |
| 2028 | **13594** |
| 2029 | **13586** |
| 2030 | **13642** |
| Thereafter | **297944** |
| Total minimum lease payments | $**365534** |
| Less: imputed interest | **249207** |
| Present value of the minimum lease payments | $**116327** |

---

**15. Reportable Segment Information** 

The Hotel Franchising & Management reportable segment includes the Company's hotel franchising operations which consists of its 22 brands and brand extensions and the hotel management operations of 13 hotels (inclusive of four owned hotels). The 22 brands and brand extensions and hotel management operations are aggregated together within this reportable segment because they have similar economic characteristics, types of customers, distribution channels, and regulatory business environments. The revenues from the hotel franchising and management business include royalty fees, initial franchise fees and relicensing fees, cost reimbursement revenues, partnership services and fees, base and incentive management fees, and other hotel franchising and management-related revenue. The Company provides certain services under its franchise and management agreements which result in direct and indirect reimbursements. The cost reimbursement revenues received from the franchisees are included in Hotel Franchising & Management revenues and are offset by the related expenses in order to calculate Hotel Franchising & Management operating income. The equity in the earnings or losses from the hotel franchising-related investment in affiliates is allocated to the Hotel Franchising & Management reportable segment.

The Company evaluates its Hotel Franchising & Management reportable segment based primarily on the operating income of the segment without allocating corporate expenses or indirect general and administrative expenses. The Corporate & Other column includes the operations of the Company's owned hotels.

Intersegment Eliminations to revenues is the elimination of Hotel Franchising & Management revenue which includes royalty fees, management and cost reimbursement fees charged to our owned hotels against the franchise and management fee expense that is recognized by our owned hotels in Corporate & Other operating income (loss).

Our President and Chief Executive Officer, who is our chief operating decision maker ("CODM"), utilizes budgeted and forecasted financial information as well as industry metrics, such as RevPar, Occupancy, and ADR, to assess the performance and to make resource allocation decisions. The CODM does not use assets by operating segment when assessing the performance or when making operating segment resource allocation decisions and therefore, assets by segment are not disclosed below.

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The following tables presents the financial information for the Company's segments:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** |
| **(in thousands)** | **Hotel Franchising & Management** | **Corporate &<br>Other** | **Intersegment Eliminations** | **Consolidated** |
| Revenues | $**1472535** | $**137439** | $**(13181)** | $**1596793** |
| Other Segment Items <sup>(1)</sup> | **834953** | **266907** | **(13181)** | **1088679** |
| Depreciation and amortization | **34520** | **25195** | **—** | **59715** |
| Operating income (loss) | **603062** | **(154663)** |  | **448399** |
| Reconciliation of segment profit or loss: |  |  |  |  |
| Interest expense |  |  |  | **91148** |
| Interest income |  |  |  | **(6237)** |
| Gain from an acquisition of a joint venture |  |  |  | **(100025)** |
| Gain on sale of assets |  |  |  | **(713)** |
| Other gains, net |  |  |  | **(6989)** |
| Equity in net loss of affiliates |  |  |  | **14324** |
| Income before income taxes |  |  |  | $**456891** |
|  | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** |
| **(in thousands)** | **Hotel Franchising & Management** | **Corporate &<br>Other** | **Intersegment Eliminations** | **Consolidated** |
| Revenues | $1470592 | $126450 | $(12203) | $1584839 |
| Other Segment Items <sup>(1)</sup> | 857843 | 223473 | (12203) | 1069113 |
| Depreciation and amortization | 28450 | 23503 |  | 51953 |
| Operating income (loss) | 584299 | (120526) |  | 463773 |
| Reconciliation of segment profit or loss: |  |  |  |  |
| Interest expense |  |  |  | 87131 |
| Interest income |  |  |  | (8646) |
| Loss on extinguishment of debt |  |  |  | 331 |
| Other losses, net |  |  |  | 1641 |
| Equity in net gain of affiliates |  |  |  | (12329) |
| Income before income taxes |  |  |  | $395645 |
|  | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** |
| **(in thousands)** | **Hotel Franchising & Management** | **Corporate &<br>Other** | **Intersegment Eliminations** | **Consolidated** |
| Revenues | $1444394 | $110854 | $(11083) | $1544165 |
| Other Segment Items <sup>(1)</sup> | 911301 | 223881 | (11083) | 1124099 |
| Depreciation and amortization | 24562 | 20476 |  | 45038 |
| Operating income (loss) | 508531 | (133503) |  | 375028 |
| Reconciliation of segment profit or loss: |  |  |  |  |
| Interest expense |  |  |  | 63780 |
| Interest income |  |  |  | (7764) |
| Gain on extinguishment of debt |  |  |  | (4416) |
| Other gains, net |  |  |  | (10649) |
| Equity in net gain of affiliates |  |  |  | (2879) |
| Income before income taxes |  |  |  | $336956 |
| <sup>(1)</sup> Other segment items for the reportable segment include selling, general and administrative expenses and reimbursable expenses from franchised and managed properties.  | <sup>(1)</sup> Other segment items for the reportable segment include selling, general and administrative expenses and reimbursable expenses from franchised and managed properties.  | <sup>(1)</sup> Other segment items for the reportable segment include selling, general and administrative expenses and reimbursable expenses from franchised and managed properties.  | <sup>(1)</sup> Other segment items for the reportable segment include selling, general and administrative expenses and reimbursable expenses from franchised and managed properties.  | <sup>(1)</sup> Other segment items for the reportable segment include selling, general and administrative expenses and reimbursable expenses from franchised and managed properties.  |

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For the years ended December 31, 2025, 2024, and 2023, the revenues generated by the international operations, including royalty fees, cost reimbursement revenues, partnership services and fees, and other revenues, were $117.8 million, $102.7 million, and $103.2 million, respectively.

**16. Commitments and Contingencies**

The Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its current legal proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations, or cash flows.

*Contingencies*

The Company entered into various limited payment guaranties with regards to the Company's VIEs in order to support its efforts to develop and own hotels that are franchised under the Company's brands. Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met, such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full, or (d) the Company, through its affiliates, ceases to be a member of the VIE. As of December 31, 2025, the maximum unrecorded exposure of the principal associated with these limited payment guaranties was $38.5 million, plus unpaid expenses and accrued but unpaid interest. The Company believes the likelihood of having to perform under these guaranties is remote. In the event of performance, the Company has recourse for certain of the guaranties in the form of partial guaranties from third parties.

*Commitments*

The Company had the following outstanding commitments as of December 31, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As part of the acquisition of Radisson Hotels Americas in August 2022, the Company entered into a long-term management arrangement, with an expiration date of July 31, 2031, to manage hotels owned by a third-party. As of December 31, 2025, the Company managed seven hotels pursuant to the long-term management arrangement. In conjunction with the management arrangement, the Company entered into a guarantee with the third-party to fund any shortfalls in the payment of the third-party owner's priority that is stipulated in the management agreement. As of December 31, 2025, no liability was recognized in the consolidated balance sheets. For the year ended December 31, 2025, the Company recognized guarantee payments of $3.8 million in selling, general and administrative expenses in the consolidated statements of income. As of December 31, 2025, the maximum unrecorded exposure of the guarantee was $18.2 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company strategically deploys capital in the form of franchise agreement acquisition cost payments across our brands to incentivize franchise development. These payments are typically made at the commencement of construction or the hotel's opening, in accordance with agreed upon provisions in the individual franchise agreements. The timing and the amount of the franchise agreement acquisition cost payments are dependent on various factors, including the implementation of various development and brand incentive programs, the level of franchise sales, and the ability of our franchisees to complete construction or convert their hotels to one of the Company's brands.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has committed to provide financing in the form of loans or credit facilities to franchisees for brand development efforts. As of December 31, 2025, the Company had remaining commitments of up to $3.5 million, if certain conditions are met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's franchise agreements require the payment of franchise fees, which include marketing and reservation fees. In accordance with the terms of our franchise agreements, the Company is obligated to use the marketing and reservation revenues it collects from the current franchisees to provide marketing and reservation services that are appropriate to support the operation of the overall system. To the extent the revenues collected exceed the expenditures incurred, the Company has a commitment to the franchisee system to make expenditures in future years. Conversely, to the extent the expenditures incurred exceed the revenues collected, the Company has the contractual enforceable right to assess and collect such amounts from the franchisees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has committed to purchase transferable production tax credits generated by qualified solar energy facilities for an aggregate purchase price of approximately $193 million over an eleven year period, from 2026 through 2036. The Company's commitments are contingent upon the satisfaction of certain legal and contractual conditions from the sellers, and the continued availability of the credits under federal tax laws. The Company expects to utilize these credits in the same quarter in which they are purchased, offsetting federal income tax estimated payments and reducing income tax expense each year.

In the ordinary course of business, the Company enters into numerous agreements that contain standard indemnities whereby the Company indemnifies another party for breaches of representations and warranties. Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate,

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(iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances, and (vi) parties under certain operating agreements. In addition, these parties are also generally indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of the future payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential amount of the future payments that could be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned indemnities, such as the indemnifications of the landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential liability.

**17. Acquisitions**

***Choice Hotels Canada Acquisition***

On July 2, 2025, the Company completed the acquisition (the "Transaction") of the remaining 50% of the outstanding shares of Choice Hotels Canada, Inc. ("Choice Hotels Canada") and amended the existing master franchise agreement for a purchase price of approximately $114.5 million, inclusive of preliminary customary adjustments related to working capital and cash. The acquisition was funded with available cash and borrowings under the Company's senior unsecured revolving credit facility. Choice Hotels Canada franchises more than 26,000 rooms in Canada, which have historically been included in the Company's franchised hotel statistics as a result of the prior master franchise agreement. Choice Hotels Canada now has the ability to offer developers access to all of the Company's 22 hotel brands and brand extensions, including the Company's extended stay brands. Prior to the acquisition date, the Company owned 50% of the outstanding shares of Choice Hotels Canada, which was accounted for under the equity method of accounting and reported within investments in affiliates in the consolidated balance sheets. As a result of the Transaction, Choice Hotels Canada is now a wholly-owned and consolidated subsidiary of the Company, and the Transaction was accounted for as a business combination using the acquisition method.

In connection with the Transaction, the Company remeasured the value of its previously held 50% equity investment to its acquisition date fair value of $114.5 million, which resulted in a gain of approximately $100.0 million that is reported within gain from an acquisition of a joint venture in the consolidated statements of income. The fair value of the previously held equity investment was determined using a market approach based on the cash consideration exchanged for the newly acquired 50% equity interest.

The following is a summary of the purchase consideration transferred:

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| | |
|:---|:---|
| | **Purchase Consideration**<br>**(in thousands)** |
| Cash consideration transferred for the newly acquired interest | $114470 |
| Fair value of the previously held interest | 114470 |
| Effective settlement of intercompany payables | 3280 |
| Total consideration, including previously held interest | $232220 |

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During the year ended December 31, 2025, the Company recognized transaction and transition costs of $2.2 million in business combination, diligence and transition costs in the consolidated statements of income.

*Preliminary Fair Values of the Assets Acquired and the Liabilities Assumed*

The Company allocated the purchase price based upon a preliminary assessment of the fair value of the assets acquired and the liabilities assumed on July 2, 2025. The preliminary fair values are based on management's estimates and assumptions, using the best information available at the time of this filing. The final valuation and related allocation of the purchase price will be completed no later than 12 months after the closing date of the acquisition. The final acquisition accounting adjustments could be materially different and may include (1) changes in the allocations to the intangible assets as well as goodwill, and (2) other changes to assets and liabilities, such as working capital. The preliminary allocation of the purchase price is as follows:

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| | |
|:---|:---|
| **(in thousands)** | **July 2, 2025** |
| **Assets acquired** | |
| Cash and cash equivalents | $44356 |
| Accounts receivable | 10706 |
| Income taxes receivable | 149 |
| Prepaid expenses and other current assets | 335 |
| Operating lease right-of-use assets | 358 |
| Intangible assets | 150665 |
| **Total assets acquired** | $206569 |
| **Liabilities assumed** |  |
| Accounts payable | $5235 |
| Accrued expenses and other current liabilities | 1926 |
| Deferred revenue - current | 333 |
| Liability for guest loyalty program - current | 7194 |
| Deferred income taxes | 38045 |
| Long-term deferred revenue | 1845 |
| Operating lease liabilities | 358 |
| Liability for guest loyalty program - noncurrent | 5607 |
| **Total liabilities assumed** | $60543 |
| **Fair value of net assets acquired** | $146026 |
| Goodwill | 86194 |
| **Total consideration, including previously held interest** | $232220 |

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*Identified Intangible Assets* 

The following table presents the estimated fair values of the acquired identified intangible assets and their estimated useful lives:

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| | | |
|:---|:---|:---|
| | **Estimated Useful Life**<br>**(in years)** | **Estimated Fair Value**<br>**(in thousands)** |
| Reacquired territory rights | 38 | $76523 |
| Franchise agreements | 12 | 74142 |
| Total intangible assets |  | $150665 |

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The reacquired territory rights represent the reacquired rights for the use of certain Choice brands within Canada. The fair value of the reacquired territory rights and the franchise agreements was estimated using a multi-period excess earnings method, which is a variation of the income approach. This method uses the present value of the incremental after-tax cash flows attributable to the intangible asset in order to estimate the fair value. This valuation methodology utilizes Level 3 inputs, and the Company is continuing to assess the assumptions used in estimating these values as well as the respective useful lives, which could result in changes to the provisional values.

*Income Taxes*

As the Transaction is accounted for as a business combination, deferred tax assets and liabilities are generally recognized on the differences between the fair value of the assets acquired and the liabilities assumed and the tax bases of the assets acquired and the liabilities assumed in the business combination. The Transaction consists of a foreign entity, so the Company asserts an indefinite reinvestment and has not recorded a deferred tax liability on the outside basis difference in its investment.

*Pro Forma Results of Operations* 

The following unaudited pro forma information presents the combined results of operations of Choice and Choice Hotels Canada as if the Company had completed the Transaction on January 1, 2024, but using the preliminary fair values of the assets acquired and the liabilities assumed as of the acquisition date. The unaudited pro forma information reflects adjustments relating to (i) the allocation of the purchase price and related adjustments, including the incremental amortization expense based on the preliminary fair values of the intangible assets acquired, (ii) the incremental impact of the senior unsecured revolving credit facility draw on interest expense, (iii) nonrecurring transaction costs, and (iv) the income tax impact of the aforementioned pro forma adjustments.

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As required by GAAP, these unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Transaction had occurred at the beginning of the period presented, nor are they indicative of the future results of operations.

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| **(in thousands)** | **2025** | **2024** |
| Revenues | $**1613116** | $1623945 |
| Net income <sup>(1)</sup> | $**268603** | $296040 |

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<sup>(1)</sup> The gain on the previously held 50% equity interest in Choice Hotels Canada is excluded from the pro forma results of operations.

*Choice Hotels Canada Results of Operations*

The Company's consolidated statements of income include Choice Hotels Canada's results of operations since the July 2, 2025 acquisition date. Choice Hotels Canada contributed $24.9 million and $9.4 million in total revenues and net income, respectively, for the year ended December 31, 2025.

*Goodwill*

The $86.2 million of goodwill recognized is primarily attributable to the value that the Company expects to realize from the existing customer base, cost synergies, and new agreements signed with new franchisees and developers. The goodwill for the Transaction is fully attributable to the Hotel Franchising & Management reportable segment and is not deductible for tax purposes. Refer to Note 5 for the reconciliation of the Company's goodwill balance.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

***Management's Evaluation of Disclosure Controls and Procedures***

The Company has a disclosure review committee whose membership includes the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), among others. The disclosure review committee's procedures are considered by the CEO and CFO in performing their evaluations of the Company's disclosure controls and procedures and in assessing the accuracy and completeness of the Company's disclosures.

Our management, with the participation of our CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), as of the end of the period covered by this annual report as required by Rules 13a-15(b) or 15d-15(b) under the Exchange Act. Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met.

An evaluation was performed under the supervision and with the participation of the Company's CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of December 31, 2025.

***Changes in Internal Control Over Financial Reporting***

There have been no changes in the Company's internal control over financial reporting that occurred during the fourth quarter of 2025 that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

**Management's Report on Internal Control Over Financial Reporting**

The management of Choice Hotels International, Inc. and its subsidiaries (together "the Company") is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control-Integrated Framework (2013)*. Based on management's assessment under those criteria, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2025.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Choice Hotels International, Inc.

**Opinion on Internal Control Over Financial Reporting**

We have audited Choice Hotels International, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Choice Hotels International, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2025 consolidated financial statements of the Company and our report dated February 19, 2026 expressed an unqualified opinion thereon.

**Basis for Opinion**

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control Over Financial Reporting**

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Tysons, Virginia

February 19, 2026

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**Item 9B. Other Information**

***Director and Officer Trading Arrangements***

The following table describes, for the fourth quarter of 2025, each trading arrangement for the sale or purchase of Company securities adopted or terminated by our directors and officers that is either (i) a contract, instruction, or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a "Rule 10b5-1 trading arrangement"), or (ii) a "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name<br>(Title)** | **Action Taken (Date of Action)** | **Type of Trading Arrangement** | **Nature of Trading Arrangement** | **Duration of Trading Arrangement** | **Aggregate Number of Securities Covered** |
| Patrick S. Pacious<br>*(President and Chief Executive Officer)* | Adopted (December 12, 2025) | Rule 10b5-1 trading arrangement | Sale | Expires June 10, 2026, unless earlier terminated | 31732 |
| Scott E. Oaksmith<br>*(Chief Financial Officer)* | Adopted (December 12, 2025) | Rule 10b5-1 trading arrangement | Sale | (1) | (1) |

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(1)This trading plan relates to up to 7,280 shares of the Company's common stock and has a scheduled expiration date of March 31, 2026, unless terminated earlier. The actual number of shares that may be sold will depend on (i) the vesting of the underlying equity award, which is subject to the achievement of certain performance criteria, and (ii) the number of shares that may be withheld to satisfy the minimum tax-withholding requirements related to the vesting of such award.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

The required information is incorporated by reference in this Form 10-K from the Company's proxy statement that will be furnished to shareholders in connection with the Company's 2026 Annual Meeting of Shareholders under the sections titled "Director Nominee Information and Qualifications," "Delinquent Section 16(a) Reports," "Board Refreshment and Consideration of Director Nominees," "Committees of the Board," and "Insider Trading Policies and Procedures". The required information on executive officers is set forth in Part I of this Form 10-K under an unnumbered item captioned "Information about our Executive Officers."

**Code of Ethics**

The Company has adopted a Code of Ethics that applies to its Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer.

The Code of Ethics is available free of charge through our internet website located at *www.choicehotels.com*. We will also provide without charge to any person, on the written or oral request of such person, a copy of our Code of Ethics. Requests should be directed to Investor Relations, 915 Meeting Street, Suite 600, North Bethesda, MD 20852 (telephone number (301) 592-5100). We will satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any material amendment to our code of ethics, and any waiver from a provision of our code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, by posting such information on our website at the internet website address set forth above.

**Item 11. Executive Compensation**

The required information is incorporated by reference in this Form 10-K from the Company's proxy statement that will be furnished to shareholders in connection with the Company's 2026 Annual Meeting of Shareholders under the sections titled "Compensation Discussion Analysis," "Corporate Governance - Compensation Committee Interlocks and Insider Participation," "Human Capital and Compensation Committee Report," "Non-Employee Director Compensation," and "Executive Compensation Tables" (excluding the information under the subheading "Pay Versus Performance").

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**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The required information is incorporated by reference in this Form 10-K from the Company's proxy statement that will be furnished to shareholders in connection with the Company's 2026 Annual Meeting of Shareholders under the sections titled "Security Ownership of Certain Beneficial Owners and Management."

**EQUITY COMPENSATION PLAN INFORMATION**

The following table sets forth information regarding the number of shares of the Company's common stock that were subject to outstanding stock options by plan category as of December 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
| | **Number of shares to be issued upon exercise of outstanding options, warrants and rights** | **Weighted average exercise price of outstanding options, warrants and rights** | **Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a))** |
| | **(a)** | | **(b)** |
| Equity compensation plans approved by shareholders | 695083 | $110.98 | 1878110 |
| Equity compensation plans not approved by shareholders | Not applicable | Not applicable | Not applicable |

---

The shares remaining available for future issuance under equity compensation plans in column (b) above are available for grant in any combination of stock options, restricted stock, stock appreciation rights, and performance share awards by the Compensation and Management Development Committee of the Board of Directors.

**Item 13. Certain Relationships and Related Transactions, and Director Independence**

The required information is incorporated by reference in this Form 10-K from the Company's proxy statement that will be furnished to shareholders in connection with the Company's 2026 Annual Meeting of Shareholders under the section titled "Certain Relationships and Related Transactions" and "Director Independence."

**Item 14. Principal Accounting Fees and Services**

The required information is incorporated by reference in this Form 10-K from the Company's proxy statement that will be furnished to shareholders in connection with the Company's 2026 Annual Meeting of Shareholders under the sections titled "Principal Auditor Fees and Services."

**PART IV**

**Item 15. Exhibits, Financial Statement Schedules**

**(a)List of Documents Filed as Part of this Report**

**1. Financial Statements**

The response to this portion of Item 15 is submitted under Item 8 of this Report on Form 10-K.

**2. Financial Statement Schedules**

Report of Independent Registered Public Accounting Firm required pursuant to Item 15(a)(2) is submitted under Item 8 of this report.

All other schedules are omitted because they are not applicable.

------

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

&nbsp;&nbsp;&nbsp;&nbsp;**3.Exhibits**

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Description** |
| 3.01(a) | <u>[Restated Certificate of Incorporation of Choice Hotels Franchising, Inc. (renamed Choice Hotels International, Inc.)](https://www.sec.gov/Archives/edgar/data/1046311/0000928385-98-001823.txt)</u> |
| 3.01A(c) | <u>[Amendment to the Restated Certificate of Incorporation of Choice Hotels International, Inc. dated April 30, 2013](https://www.sec.gov/Archives/edgar/data/1046311/000119312513189958/d531359dex31.htm)</u> |
| 3.01B(gg) | <u>[Amendment to the Restated Certificate of Incorporation of Choice Hotels International, Inc., dated May 16, 2024](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001046311/000119312524141780/d838352d8k.htm)</u> |
| 3.02C(gg) | <u>[Second Amended and Restated Bylaws of Choice Hotels International, Inc., dated as of May 16, 2024](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001046311/000119312524141780/d838352d8k.htm)</u> |
| 4.01(i) | <u>[Indenture, dated August 25, 2010 between the Company and Wells Fargo Bank, National Association, as Trustee](https://www.sec.gov/Archives/edgar/data/1046311/000119312510196521/dex41.htm)</u> |
| 4.04(q) | <u>[Third Supplemental Indenture dated November 27, 2019 among Choice Hotels International, Inc. and Wells Fargo Bank, National Association](https://www.sec.gov/Archives/edgar/data/1046311/000119312519302484/d838545dex41.htm)</u> |
| 4.05(aa) | <u>[Description of Capital Stock Registered Pursuant to Section 12 of the Securities Exchange Act of 1934](https://www.sec.gov/Archives/edgar/data/1046311/000104631120000011/exhibit405.htm)</u> |
| 4.06(w) | <u>[Fourth Supplemental Indenture dated July 23, 2020 among Choice Hotels International, Inc. and Wells Fargo Bank, National Association](https://www.sec.gov/Archives/edgar/data/1046311/000119312520197778/d33950dex41.htm)</u> |
| 4.07(hh) | <u>[Fifth Supplemental Indenture, dated as of July 2, 2024, between Choice Hotels International, Inc. and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001046311/000119312524174378/d861338d8k.htm)</u> |
| 10.02(d) | <u>[Amended and Restated Chairman's Services Agreement dated September 10, 2008 by and between Choice Hotels International, Inc. and Stewart Bainum, Jr.](https://www.sec.gov/Archives/edgar/data/1046311/000119312508231535/dex1002a.htm)</u> |
| 10.02A(r)† | <u>[Amendment to Amended and Restated Chairman's Services Agreement dated January 1, 2012 between Choice Hotels International, Inc. and Stewart Bainum, Jr.](https://www.sec.gov/Archives/edgar/data/1046311/000104631112000017/bainum-amendmenttochairman.htm)</u> |
| 10.02B(n)† | <u>[Amendment to Amended and Restated Chairman's Services Agreement dated January 1, 2017 between Choice Hotels International, Inc. and Stewart Bainum, Jr.](https://www.sec.gov/Archives/edgar/data/1046311/000104631117000006/chh123116ex1002b.htm)</u> |
| 10.02C(b)† | <u>[Amendment to Amended and Restated Chairman's Services Agreement dated January 1, 2019](https://www.sec.gov/Archives/edgar/data/1046311/000104631119000011/chh12312018ex1002c.htm)</u> |
| 10.02D(dd)† | <u>[Amendment to Amended and Restated Chairman's Services Agreement effective as of January 1, 2022](https://www.sec.gov/Archives/edgar/data/1046311/000104631122000009/chh12312021ex1002d.htm)</u> |
| 10.02E(jj)† | <u>[Amendment to Amended and Restated Chairman's Services Agreement effective as of January 1, 2025](https://www.sec.gov/Archives/edgar/data/1046311/000104631125000007/chh12312024ex1002.htm)</u> |
| 10.04(c)† | <u>[Choice Hotels International, Inc. Executive Incentive Compensation Plan](https://www.sec.gov/Archives/edgar/data/1046311/000119312513189958/d531359dex102.htm)</u> |
| 10.05(x)† | <u>[Choice Hotels International, Inc. 2017 Long-Term Incentive Plan](https://www.sec.gov/Archives/edgar/data/1046311/000104631117000010/exhibit101-ltip.htm)</u> |
| 10.06(o)† | <u>[Choice Hotels International, Inc. Executive Deferred Compensation Plan (for Grandfather Account Balances)](https://www.sec.gov/Archives/edgar/data/1046311/000092838503000978/dex1013.txt)</u> |
| 10.06A(g)† | <u>[Amended and Restated Choice Hotels International, Inc. Executive Deferred Compensation Plan (for Non-Grandfather Account Balances)](https://www.sec.gov/Archives/edgar/data/1046311/000119312509042353/dex1012.htm)</u> |
| 10.07(m)† | <u>[Non-Competition, Non-Solicitation & Severance Benefit Agreement between the Company and Patrick Pacious, dated May 5, 2011](https://www.sec.gov/Archives/edgar/data/1046311/000119312511133436/dex101.htm)</u> |
| 10.07A(r)† | <u>[Amendment to Non-Competition, Non-Solicitation & Severance Benefit Agreement between the Company and Patrick Pacious, dated March 13, 2012](https://www.sec.gov/Archives/edgar/data/1046311/000104631112000017/amendmenttopaciousagreement.htm)</u> |
| 10.07B(y)† | <u>[Amended and Restated Non-Competition, Non-Solicitation & Severance Benefit Agreement between the Company and Patrick S. Pacious, dated September 12, 2017](https://www.sec.gov/Archives/edgar/data/1046311/000119312517287367/d452228dex101.htm)</u> |
| 10.08(f)† | <u>[Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and Simone Wu, dated February 13, 2012](https://www.sec.gov/Archives/edgar/data/1046311/000104631113000007/chhex1001-nonxcompetexwu.htm)</u> |
| 10.08A(f)† | <u>[Amendment to Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and Simone Wu, dated March 25, 2013](https://www.sec.gov/Archives/edgar/data/1046311/000104631113000007/chh1002-amendxwu.htm)</u> |
| 10.09(z)† | <u>[Form of Non-Competition, Non-Solicitation & Severance Benefit Agreement](https://www.sec.gov/Archives/edgar/data/1046311/000104631117000015/exhibit1001.htm)</u> |
| 10.10(ee)† | <u>[2023 Form of Non-Competition, Non-Solicitation & Severance Benefit Agreement](https://www.sec.gov/Archives/edgar/data/1046311/000104631123000031/chh-exx1001.htm)</u> |

---

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

---

| | |
|:---|:---|
| 10.11(v) | <u>[Unit Purchase Agreement, dated as of December 15, 2017, by and among Choice Hotels International, Inc., WoodSpring Hotels LLC and WoodSpring Hotels Franchise Services LLC](https://www.sec.gov/Archives/edgar/data/1046311/000119312517371273/d482229dex21.htm)</u> |
| 10.12(u) | <u>[Amended and Restated Senior Unsecured Credit Agreement dated August 20, 2018 among Choice Hotels International, Inc., Deutsche Bank, AG New York Branch, as administrative agent, the other agents there to and a syndicate of lenders](https://www.sec.gov/Archives/edgar/data/1046311/000119312518253010/d608928dex101.htm)</u> |
| 10.13(k) | <u>[Extension Confirmation Letter dated as of July 2, 2019 in connection with Senior Unsecured Credit Agreement](https://www.sec.gov/Archives/edgar/data/1046311/000104631119000040/chhex1002executedextensi.htm)</u> |
| 10.14(j) | <u>[First Amendment to the Amended and Restated Senior Unsecured Credit Agreement, dated February 18, 2020 among Choice Hotels International, Inc., Deutsche Bank AG New York Branch, as administrative agent, and the lenders party thereto](https://www.sec.gov/Archives/edgar/data/1046311/000119312520043990/d857103dex101.htm)</u> |
| 10.15(s) | <u>[Extension Confirmation Letter dated as of August 12, 2020 in connection with Senior Unsecured Credit Agreement](https://www.sec.gov/Archives/edgar/data/1046311/000104631120000041/a1001choiceextensionconf.htm)</u> |
| 10.16(l) | <u>[Second Amendment to the Amended and Restated Senior Unsecured Credit Agreement dated August 11, 2021, among Choice Hotels International, Inc., Deutsche Bank AG New York Bank, as Administrative Agent, and the lender's party thereto](https://www.sec.gov/Archives/edgar/data/0001046311/000104631121000045/exhibit1001.htm)</u> |
| 10.17(l) | <u>[Extension Confirmation Letter dates as of August 11, 2021 in connection with Senior Unsecured Credit Agreement](https://www.sec.gov/Archives/edgar/data/0001046311/000104631121000045/exhibit1002.htm)</u> |
| 10.18(p) | <u>[Assignment and Acceptance dated May 11, 2022 in connection with Senior Unsecured Credit Agreement](https://www.sec.gov/Archives/edgar/data/1046311/000104631122000027/chh-ex1002assignmentaccept.htm)</u> |
| 10.19(ff) | <u>[Third Amendment to the Amended and Restated Senior Unsecured Credit Agreement, dated February 14, 2023 among Choice Hotels International, Inc., Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto](https://www.sec.gov/Archives/edgar/data/1046311/000119312523039187/d422250dex101.htm)</u> |
| 10.20(ff) | <u>[Successor Agency Agreement, dated February 14, 2023, by and among Wells Fargo Bank, National Association, as successor agent, Deutsche Bank AG New York Branch, as resigning agent, and Choice Hotels International, Inc.](https://www.sec.gov/Archives/edgar/data/1046311/000119312523039187/d422250dex102.htm)</u> |
| 10.21(ii) | <u>[Second Amended and Restated Senior Unsecured Credit Agreement, dated as of June 28, 2024, among Choice Hotels International, Inc., Wells Fargo Bank, National Association, as administrative agent, the other agents party thereto and a syndicate of lenders](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001046311/000119312524172279/d860049d8k.htm)</u> |
| 10.22(bb) | <u>[Share Sale and Purchase Agreement, dated as of June 12, 2022 by and among Choice Hotels International, Inc., Radisson Holdings Inc., Radisson Hospitality, Inc., Aplite Holdings AB and Radisson Hospitality Belgium BV/SRL](https://www.sec.gov/Archives/edgar/data/1046311/000119312522172398/d358861dex21.htm)</u> |
| 10.23(cc)† | <u>[Amendment to Non-Competition, Non-Solicitation & Severance Benefit Agreement between the Company and Patrick Pacious, dated May 24, 2022](https://www.sec.gov/Archives/edgar/data/1046311/000119312522161767/d348232dex101.htm)</u> |
| 10.24(cc)† | <u>[Letter Agreement between the company and Patrick S. Pacious, dated May 24, 2022](https://www.sec.gov/Archives/edgar/data/1046311/000119312522161767/d348232dex102.htm)</u> |
| 10.25(jj)† | <u>[Amendment to Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and Robert McDowell, dated January 15, 2025](https://www.sec.gov/Archives/edgar/data/1046311/000104631125000007/chh12312024ex1025.htm)</u> |
| 10.26(kk)† | <u>[Choice Hotels International, Inc. 2025 Long-Term Incentive Plan](https://www.sec.gov/Archives/edgar/data/1046311/000104631125000007/chh12312024ex1025.htm)</u> |
| 10.27†\* | <u>[2025 Form of Non-Competition, Non-Solicitation and Severance Benefit Agreement](chh-2025x12x31ex1027.htm)</u> |
| 10.28†\* | <u>[Amendment to Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and Dominic Dragisich, dated December 31, 2025](chh-2025x12x31ex1028.htm)</u> |
| 10.29†\* | <u>[Amendment to Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and David Pepper, dated December 31, 2025](chh-2025x12x31ex1029.htm)</u> |
| 10.30†\* | <u>[Amendment to Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and Scott Oaksmith, dated December 31, 2025](chh-2025x12x31ex1030.htm)</u> |
| 10.31†\* | <u>[Amendment to Non-Competition, Non-Solicitation and Severance Benefit Agreement between the Company and Simone Wu, dated December 31, 2025](chh-2025x12x31ex1031.htm)</u> |
| 19(jj) | <u>[Insider Trading Policy, dated April 19, 2018](https://www.sec.gov/Archives/edgar/data/1046311/000104631125000007/chh12312024ex19.htm)</u> |
| 21.01\* | <u>[Subsidiaries of Choice Hotels International, Inc.](chh-2025x12x31ex2101.htm)</u> |

---

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<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

---

| | |
|:---|:---|
| 23\* | <u>[Consent of Ernst & Young LLP](chh-2025x12x31ex23.htm)</u> |
| 31.1\* | <u>[Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)](chh-2025x12x31ex311.htm)</u> |
| 31.2\* | <u>[Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)](chh-2025x12x31ex312.htm)</u> |
| 32\* | <u>[Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350](chh-2025x12x31ex32.htm)</u> |
| 97(jj) | <u>[Dodd-Frank Compensation Recovery Policy effective October 2, 2023](https://www.sec.gov/Archives/edgar/data/1046311/000104631125000007/chh12312024ex97.htm)</u> |
| 101.INS\* | XBRL Instance Document |
| 101.SCH\* | XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | XBRL Taxonomy Calculation Linkbase Document |
| 101.DEF\* | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | XBRL Taxonomy Label Linkbase Document |
| 101.PRE\* | XBRL Taxonomy Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\*&nbsp;&nbsp;&nbsp;&nbsp;Filed herewith.

†&nbsp;&nbsp;&nbsp;&nbsp;Indicates a management contract or compensatory plan.

(a)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Registration Statement on Form S-4, filed August 31, 1998.

(b)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018, filed February 26, 2019.

(c)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated April 26, 2013, filed May 1, 2013.

(d)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, filed November 10, 2008.

(e)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on form 8-K dated May 1, 2006, filed May 5, 2006.

(f)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed May 8, 2013.

(g)Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008, filed March 2, 2009.

(h) Incorporated by reference to the identical document filed as Appendix B to Choice Hotels International, Inc.'s Definitive Proxy Statement on Form DEF 14A K filed March 25, 2010.

(i) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated August 25, 2010, filed August 25, 2010.

(j) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated February 18, 2020, filed February 21, 2020.

(k) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed November 5, 2019.

(l) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International Inc's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed November 4, 2021.

(m) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated May 5, 2011, filed May 10, 2011.

------

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(n) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016, filed February 27, 2017.

(o) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002, filed March 31, 2003.

(p) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed August 4, 2022.

(q) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated November 27, 2019, filed November 27, 2019.

(r) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed May 9, 2012.

(s) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed November 5, 2020.

(t) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated April 24, 2015, filed April 29, 2015.

(u) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated August 20, 2018, filed August 20, 2018.

(v) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated December 15, 2017, filed December 18, 2017.

(w) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated July 23, 2020, filed July 23, 2020.

(x) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated April 21, 2017, filed April 24, 2017.

(y) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated September 18, 2017, and filed September 18, 2017.

(z) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed May 5, 2017.

(aa) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020.

(bb) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated June 12, 2022, filed June 13, 2022.

(cc) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated May 24, 2022, filed May 27, 2022.

(dd) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2021, filed February 24, 2022.

(ee) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 8, 2023.

(ff) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated February 14, 2023, filed February 14, 2023.

(gg) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated May 15, 2024, filed May 17, 2024.

(hh) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated July 2, 2024, filed July 2, 2024.

(ii) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated June 28, 2024, filed June 28, 2024.

------

<u>[**Table of Contents**](#i3b6e36adc65c4bfb8037f9d58cf59e61_10)</u>

(jj) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2024, filed February 20, 2025.

(kk) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated March 15, 2025, filed May 15, 2025.

**Item 16. Form 10-K Summary**

None.

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**SIGNATURE**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| | CHOICE HOTELS INTERNATIONAL, INC. |
| By: | /s/ Patrick S. Pacious |
|  | **Patrick S. Pacious<br>President and Chief Executive Officer** |

---

Dated: February 19, 2026

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **<u>Signature</u>** | **<u>Title</u>** | **<u>Date</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;STEWART W. BAINUM, JR | Chairman, Director | February 19, 2026 |
| &nbsp;&nbsp;Stewart W. Bainum, Jr. |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; /s/&nbsp;&nbsp;&nbsp;&nbsp;WILLIAM L. JEWS | Director | February 19, 2026 |
| William L. Jews |  |  |
| /s/ PATRICK S. PACIOUS | President and Chief Executive Officer, Director (Principal Executive Officer) | February 19, 2026 |
| Patrick S. Pacious |  |  |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;BRIAN B. BAINUM | Director | February 19, 2026 |
| Brian B. Bainum |  |  |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;MONTE J.M. KOCH&nbsp;&nbsp;&nbsp;&nbsp; | Director | February 19, 2026 |
| Monte J.M. Koch |  |  |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;ERVIN R. SHAMES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | Director | February 19, 2026 |
| Ervin R. Shames |  |  |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;JOHN P. TAGUE | Director | February 19, 2026 |
| John P. Tague |  |  |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;LIZA K. LANDSMAN | Director | February 19, 2026 |
| Liza K. Landsman |  |  |
| /s/ MAUREEN SULLIVAN | Director | February 19, 2026 |
| Maureen Sullivan |  |  |
| /s/ DONNA F. VIEIRA | Director | February 19, 2026 |
| Donna F. Vieira |  |  |
| /s/ GORDON A. SMITH | Director | February 19, 2026 |
| Gordon A. Smith |  |  |
| /s/&nbsp;&nbsp;&nbsp;&nbsp;SCOTT E. OAKSMITH | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | February 19, 2026 |
| Scott E. Oaksmith |  |  |

---

## Exhibit 10.27

**Exhibit 10.27**

**<u>Non-Competition, Non-Solicitation & Severance Benefit Agreement</u>**

This Non-Competition, Non-Solicitation & Severance Benefit Agreement ("<u>Agreement</u>") is entered into this ___ day of _______________, 20__ between Choice Hotels International, Inc. ("<u>Choice Hotels</u>"), a Delaware corporation with principal offices at 915 Meeting Street, North Bethesda, Maryland 20852, and ______________________ ("<u>Employee</u>").

<u>Recitals</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Employee is a management-level employee of Choice Hotels and/or a subsidiary of Choice Hotels (collectively, "<u>Choice</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Choice devotes significant time, resources and effort to the training and advancement of its management employees, and its management team constitutes a significant asset and important competitive edge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Choice has determined that it is in the best interest of the company and its shareholders to enter into an agreement with Employee whereby Employee agrees to certain non-competition, non-solicitation and confidentiality restrictions in consideration of, among other things, certain severance benefits.

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree to the following terms:

1.<u>Definitions</u>. As used in this Agreement, the following terms shall have the ascribed meaning:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"<u>Board</u>" means the Board of Directors of Choice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"<u>Cause</u>" means any one or more of the following, whether occurring before or after the date hereof: (i) Employee's deliberate and continued refusal to carry out duties and instructions of the Board and CEO consistent with the position following written notice by Choice to Employee and a five business days cure period; (ii) Employee's commission of an act materially detrimental to the financial condition, operations and/or goodwill of Choice; (iii) Employee's gross negligence or willful misconduct in the performance of duties to Choice; (iv) Employee's commission of any act of theft, fraud, dishonesty, breach of trust or breach of fiduciary duty involving Choice; (v) Employee's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud or embezzlement; (vi) any breach by Employee of the covenants contained in this Agreement, or (vii) the material violation by Employee of any Choice policy or any statutory or common law duty to Choice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"<u>Change in Control</u>" means the happening of the earliest of the following to occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Any "person" as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than (i) Choice, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of Choice, (iii) any corporations owned, directly or indirectly, by the stockholders of Choice in substantially the same proportions as their ownership of stock, or (iv) any Existing Shareholder) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Choice representing 33% or more of the combined voting power of Choice's then outstanding voting securities. An "<u>Existing Stockholder</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)(i) all the lineal descendants of Stewart Bainum, Sr., and his wife, and their spouses (so long as they remain spouses) and adopted children of such descendants; (ii) all trusts for the benefit of any persons described in clause (i) and trustees of such trusts; (iii) all legal representatives of any person or trust described in clauses (i) and (ii) in their respective capacities as such; and (iv) all partnerships, corporations, limited liability companies or other entities controlled by the persons described in clauses (i), (ii) or (iii) (such persons referred to in this clause (A) collectively, "<u>Bainum Affiliates</u>"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)any other stockholder of Choice which, together with such stockholder's affiliates, owns more than 5% of the common stock of Choice Hotels International, Inc. as of the date of this

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Agreement so long as the Bainum Affiliates continue to own more common stock of Choice Hotels International, Inc. than such stockholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Individuals constituting the Board on the date of this Agreement and the successors of such individuals ("<u>Continuing Directors</u>") cease to constitute a majority of the Board. For this purpose, a director shall be a successor if and only if he or she was nominated by a Board (or a Nominating Committee thereof) on which individuals constituting the Board on the date of this Agreement and their successors (determined by prior application of this sentence) constituted a majority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The stockholders of Choice approve a plan of merger or consolidation ("<u>Combination</u>") with any other corporation or legal person, other than a Combination which would result in stockholders of Choice immediately prior to the Combination owning, immediately thereafter, more than sixty-five percent (65%) of the combined voting power of either the surviving entity or the entity owning directly or indirectly all of the common stock, or its equivalent, of the surviving entity; provided, however, that if stockholder approval is not required for such Combination, the Change in Control shall occur upon the consummation of such Combination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The stockholders of Choice approve a plan of complete liquidation of Choice or an agreement for the sale or disposition by Choice of all or substantially all of Choice's stock and/or assets, or accept a tender offer for substantially all of Choice's stock (or any transaction having a similar effect); provided, however, that if stockholder approval is not required for such transaction, the Change in Control shall occur upon consummation of such transaction.

Notwithstanding the foregoing, in the case of any payment or benefit hereunder that constitutes deferred compensation under Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively "<u>Section 409A</u>"), which is triggered based upon the occurrence of a Change in Control, a Change in Control shall not be deemed to have occurred unless such transaction constitutes a change in the ownership of Choice, a change in effective control of Choice, or a change in the ownership of a substantial portion of Choice's assets, in each case under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"<u>Change in Control Termination</u>" means and includes the termination of Employee's employment with Choice at any time during the twelve (12) month period after a Change in Control if such termination is (i) by Choice for any reason other than Cause, (ii) by Employee for Good Reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"<u>Code</u>" means the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"<u>Competing Business</u>" means any business or enterprise that: (i) is engaged in the mid-market or economy hotel franchising business, (ii) competes in the same upscale, select service segment as Cambria Hotels and Suites or any successor or substantially similar Choice brand, or (iii) competes in any other line of business in which Choice is materially engaged at the time of the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)"<u>Confidential Information</u>" means any non-public information, in any format, relating to the business of Choice, including, but not limited to, present or prospective operating, marketing and development plans, training manuals, training policies and procedures, financial and technical information, passwords, source codes, personnel information, franchisee information, business systems, trade secrets, pricing and cost information, contact lists, strategic plans or strategies, operating data or Choice policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)"<u>Delay Period</u>" shall have the meaning set forth in Section 14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)"<u>Disability</u>" means if Employee is unable to perform the essential functions of Employee's position, after any legally required reasonable accommodation, for more than 180 days (whether or not consecutive) in any period of 365 consecutive days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)"<u>Good Reason</u>" means a voluntary termination by Employee following a material, substantial adverse change in either Employee's compensation or position and responsibilities, provided such termination occurs within forty-five (45) days of the change in compensation or position. Employee must provide Choice with at least thirty (30) days' prior written notice of electing a Good Reason termination. Notwithstanding the foregoing, a change in reporting structure (for example, from reporting to the CEO to reporting to an EVP or SVP, etc.) does not, on its own (ipso facto), constitute a "material, substantial adverse change" in position and responsibilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)"<u>Non-Renewal</u>" shall have the meaning set forth in Section 2.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)"<u>Release Agreement</u>" means the release of claims attached as Exhibit A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)"<u>Severance Benefits</u>" means the benefits specified in Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)"<u>Severance Benefit Period</u>" means the seventy (70) week period following the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)"<u>Termination Date</u>" means the date Employee's employment with Choice ends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)"<u>Works</u>" means any ideas, concepts, methods of operation, processes, programs or other materials (including training manuals, policies and procedures) that Employee conceived, created, developed or wrote while employed by Choice that relate in any manner to the business of Choice.

2.<u>Term</u>. The initial term of this Agreement shall be for a period of three (3) years commencing on ___________________ and will remain in effect until ____________. The term of this Agreement shall be automatically extended for an additional three year period on ____________ and each subsequent three year anniversary thereafter, unless and until Choice or the Employee provides written notice to the other party in accordance with Section 11 hereof not less than one hundred eighty (180) days before such date that such party is electing not to extend the term of this Agreement ("<u>Non-Renewal</u>"). Anything herein to the contrary notwithstanding, if on the date of a Change in Control, the remaining term of this Agreement is less than twelve (12) months, the term of the Agreement shall be automatically extended to the end of the twelve-month period following such Change in Control. References herein to the term of this Agreement shall include the initial term and any additional period for which this Agreement is extended.

3.<u>Confidentiality</u>. Employee acknowledges that Confidential Information and Works are valuable and unique assets belonging to Choice. During employment and after the Termination Date, Employee shall not, except as required by law or by Employee's duties for Choice and for the benefit of Choice, directly or indirectly, or cause others to, make use of or disclose to others any Confidential Information or Works. Notwithstanding the foregoing, Confidential Information does not include information which was or becomes generally available to the public other than as a result of a disclosure by Employee. Works constitute works made for hire and in all circumstances shall be and remain the sole and exclusive property of Choice, whether or not protectable under any laws, including patent, trademark, copyright or trade secret laws.

4.<u>Non-Solicitation</u>. During employment and for the Severance Benefit Period, Employee agrees, except as required by Employee's duties for Choice and for the benefit of Choice or with the prior written consent of Choice, not to solicit or attempt to solicit, directly or indirectly, on Employee's behalf or on behalf of any other person or entity, any person or entity who then is or who was as of the Termination Date, an employee, business partner or franchisee of Choice, or was actively solicited to have such a relationship with Choice within six (6) months prior to the Termination Date, to cease, curtail or refrain from entering into such a relationship with Choice. Nothing in the foregoing shall be construed as preventing Employee from otherwise lawfully soliciting business from any then current or prospective business partner or franchisee that is for a line of business other than any Competing Business.

5.<u>Non-Competition</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)During employment and for the Severance Benefit Period, regardless of whether such termination is voluntary or involuntary and regardless of the reason for the termination, Employee shall not directly or indirectly in any capacity: (a) engage in any Competitive Activity (as defined below) for a Competitor (as defined below) within the Prohibited Territory (as defined below); or (b) assist anyone else in engaging in Competitive Activity within the Prohibited Territory. The provisions of this Section 5 shall not preclude Employee, during the Severance Benefit Period, from being employed by a Competitor so long as such employment is not engaged in Competitive Activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Employee acknowledges and agrees that the scope, duration and terms of the restrictions set forth in Section 5(a) of this Agreement are reasonable and necessary to protect Choice's legitimate business interests, including by not limited to, Confidential Information, trade secrets and business know-how and relationships of Choice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"<u>Competitor</u>" means the following U.S. based companies including their respective corporate affiliates and subsidiaries operating in the U.S.:

ESH Strategies Branding LLC aka Extended Stay America

Hilton Worldwide Holdings Inc.

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Hyatt Hotels Corporation

InterContinental Hotels Group PLC aka IHG Hotels & Resorts

Marriott International, Inc.

Wyndham Hotel Group, LLC aka Wyndham Hotels & Resorts

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"<u>Competitive Activity</u>" means competing against Choice by doing any of the following directly or indirectly in a Prohibited Territory for a Competitor: (a) performing the same or similar work as Employee performed on behalf of Choice at any time during Employee's last twelve (12) months of employment with Choice (the "<u>Similar Work</u>"); (b) performing or overseeing Similar Work in any executive or upper management capacity or performing work which involves the management or oversight of others who perform Similar Work; and/or (c) performing work in any capacity that would be reasonably likely to risk the disclosure and/or use of Confidential Information. Notwithstanding the foregoing, owning the stock or options to acquire stock totaling less than five percent (5%) of the outstanding shares in a public company shall not constitute, by itself, Competitive Activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"<u>Prohibited Territory</u>" means the United States.

6.<u>Cooperation</u>. Employee agrees to be reasonably available and to cooperate with Choice in: (i) any internal investigation; (ii) any investigation, defense or prosecution of any claims or actions which already have been brought, are currently pending, or which may be brought in the future against Choice by a third party or by or on behalf of Choice against any third party, whether before a state or federal court, any state or federal government agency, or a mediator or arbitrator; and/or (iii) any other administrative, regulatory, or judicial inquiry, investigation, proceeding or arbitration. Employee understands and agrees that reasonable cooperation includes, but is not limited to, being available to Choice upon reasonable notice for interviews and factual investigations; appearing at Choice's request to give testimony without requiring service of a subpoena or other legal process; volunteering to Choice pertinent information; and turning over all relevant documents which are in or may come into Employee's possession. The term "cooperation" does not mean that Employee must provide information that is favorable to Choice; it means only that Employee will provide truthful information within Employee's knowledge and possession upon request of Choice. Employee further agrees that, to the extent permitted by law, Employee will notify Choice promptly in the event that Employee is served with a subpoena (other than a subpoena issued by a government agency), or in the event that Employee is asked to provide a third party (other than a government agency) with information concerning any actual or potential complaint or claim against Choice.

7.<u>Severance Benefits</u>. If Employee terminates with Good Reason or is terminated by Choice for any reason other than Cause, Change in Control Termination, Disability or death and Employee executes the Release Agreement within twenty-one (21) days of the Termination Date (or forty-five (45) days if such longer review period is required by the ADEA) and has not revoked the Release Agreement as permitted therein, Choice shall provide to Employee, in consideration of Employee's promises and covenants contained in this Agreement and the Release Agreement, a Severance Benefit equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)A lump sum payment in an amount equal to the base salary that Employee would have received over the Severance Benefit Period based on Employee's base salary rate in effect as of the Termination Date (not taking into account any reduction in base salary that constitutes Good Reason);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If the Termination Date occurs after June 30 in a given year, then Employee shall be eligible for full payout of the bonus for that fiscal year based on the actual attainment level for the company objectives and at a deemed 100% achievement of the individual Management Bonus Objectives. The bonus will be paid out, if at all, at such time as the other corporate officers receive their bonus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Stock option, stock awards, and performance-based stock unit awards granted under Choice's Long-Term Incentive Plan on or after the date of this Agreement shall continue to vest pursuant to their applicable terms during the Severance Benefit Period and vested stock options shall be exercisable during the Severance Benefit Period. At the end of the Severance Benefit Period, vesting shall cease and Employee shall have 90 days thereafter to exercise all stock options that are vested at the end of the Severance Benefit Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)During the Severance Benefit Period, Choice will provide Employee at its expense with its standard outplacement services for executive level employees. Upon obtaining other employment, Employee will be ineligible to continue receiving these outplacement services at Choice's expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)A lump sum payment in an amount equal to Choice's portion of the projected contributions to continue medical, dental and vision coverage under Choice's group medical, dental and vision programs (which coverage Employee was receiving as of the Termination Date) for the Severance Benefit Period plus an amount equal to the tax gross-up amount on such Choice contributions determined based on the supplemental Federal tax

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rate plus Social Security, state and local taxes, as applicable. Employee may use such aggregate amount for any purpose Employee chooses including, without limitation, payment to Choice to secure continued health insurance coverage known as COBRA subject to the COBRA requirements.

The Release Agreement must be irrevocably effective within sixty (60) days following the Termination Date. Subject to the six-month delay referenced in Section 14, the payments shall begin or be made on the sixtieth day following the Termination Date.

8.<u>Re-employment</u>. After the Termination Date, Employee shall not be required to mitigate damages as a condition to receiving Severance Benefits, but nevertheless shall be entitled to pursue other employment as permitted by this Agreement. If Employee chooses to pursue and accept other employment or consulting during the Severance Benefit Period, Choice shall be entitled to receive as an offset, and thereby reduce its payment under Sections 7(a) and (b), the amounts received by Employee from any other active employment. Employee agrees to notify Choice within seven (7) business days of accepting such employment by sending such notice to Choice Hotels International, 915 Meeting Street, North Bethesda, Maryland 20852, Attention: Chief Human Resources Officer. As a condition to Employee receiving the Severance Benefits from Choice, Employee agrees to permit verification of Employee's employment records and Federal income tax returns by an independent attorney or accountant, selected by Choice but reasonably acceptable to Employee, who agrees to preserve the confidentiality of the information disclosed by Employee except to the extent required to permit Choice to verify the amounts received by Employee from other active employment. Choice shall receive credit for unemployment insurance benefits, social security insurance or like amounts actually received by Employee.

9.<u>Change in Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)If, within twelve (12) months after a Change in Control, there occurs a Change in Control Termination, Employee shall receive as severance compensation a lump sum payment in an amount equal to 200% of Employee's base salary at the rate in effect as of the Termination Date, plus 200% of the amount of Employee's eligible full year bonus for that fiscal year based on a 100% attainment level for the company objectives and a 100% attainment level for the individual Management Bonus Objectives. Additionally, all unvested restricted stock, performance vested restricted stock units and stock option awards granted after the date of this Agreement and then held by Employee shall automatically become fully vested as of the date of the Change of Control Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Employee's right to receive the benefits described in Section 9(a) shall be conditioned upon Employee executing the Release Agreement. The Release Agreement must be irrevocably effective within sixty (60) days following the Termination Date. Subject to the six-month delay referenced in Section 14, the payments shall begin or be made on the sixtieth day following the Termination Date.

10.<u>Acknowledgments</u>. Employee and Choice acknowledge and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The restrictions contained in Sections 3, 4 and 5 are reasonable and necessary to protect and preserve the legitimate interests, properties, goodwill and business of Choice, that Choice would not have entered into this Agreement in the absence of such restrictions and that irreparable injury will be suffered by Choice should the Employee breach any of those provisions. Employee represents and acknowledges that (i) the Employee has been advised by Choice to consult Employee's own legal counsel at Employee's expense prior to executing this Agreement, and (ii) that the Employee has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with the Employee's counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)A breach of any of the restrictions in this Agreement cannot be adequately compensated by monetary damages and Choice shall be entitled to seek preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as any other appropriate equitable relief, which rights shall be cumulative and in addition to any other rights or remedies to which Choice may be entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In the event that any of the provisions of this Agreement should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, it is the intention of the parties that the provision shall be amended to the extent of the maximum time, geographic, service, or other limitations permitted by applicable law, that such amendment shall apply only within the jurisdiction of the court that made such adjudication and that the provision otherwise be enforced to the maximum extent permitted by law. The invalidity of any provision of this Agreement shall not affect the validity of the remaining provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)This Agreement supersedes and extinguishes any rights Employee may have under Choice's standard Severance Benefit Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)This Agreement shall not be construed as giving the Employee the right to be retained in the service of Choice for any definite period or otherwise to change Employee's status as an at-will employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)All amounts payable hereunder shall be subject to all applicable tax withholding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Employee agrees that Employee is not entitled to any unemployment benefits, and, to the extent permitted by law, that Employee does not intend to seek any unemployment benefits, during the Severance Benefit Period. Choice will not contest Employee's claim for unemployment benefits after the Severance Benefit Period.

11.<u>Notices</u>. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when hand delivered, sent by overnight courier, or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Choice:

Choice Hotels International, Inc.

915 Meeting Street

North Bethesda, Maryland 20852

Attn.: General Counsel

If to the Employee:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at the last residential address known by Choice.

or to such other address as either party may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

12.<u>Arbitration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In the event of any dispute or claim relating to or arising out, directly or indirectly, of Employee's employment relationship with Choice, this Agreement, or the termination of employment with Choice for any reason (including, but not limited to, any claims of breach of contract, tort, wrongful termination, violation of any law, or unlawful discrimination, harassment or retaliation), Employee and Choice agree that all such disputes shall be fully resolved by private, binding arbitration conducted by the American Arbitration Association ("<u>AAA</u>") before a single arbitrator in Montgomery County, Maryland under the AAA's Employment Arbitration Rules then in effect, which rules are available online at the AAA's website at www.adr.org or by requesting a copy from Choice's Human Resources Department. The arbitrator shall be a currently licensed attorney with at least ten (10) years' experience in employment law in the United States. This arbitration provision shall apply to any and all claims asserted by Employee against Choice or any of its affiliates, and each of their respective employees, officers, agents, attorneys, owners, directors, or affiliates, and any and all claims against Employee by those entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The arbitrator shall permit the parties to conduct reasonable discovery and is empowered to award all remedies otherwise available in a court of competent jurisdiction and any judgment rendered by the arbitrator may be entered by any court of competent jurisdiction. The arbitrator shall issue an award in writing and state the essential findings and conclusions on which the award is based. This arbitration agreement shall provide the exclusive remedy of the parties to seek redress of claims, and each party knowingly and voluntarily waives the right to a trial before a judge or jury, and any right he, she, or it might have to seek redress in any other forum, except for the right to file a charge with applicable administrative agencies (including, but not limited to the National Labor Relations Board, Equal Employment Opportunity Commission, the Maryland Workers' Compensation Commission or Division of Unemployment Insurance). If Employee still has the right to and chooses to pursue such administrative claim after exhausting all administrative remedies, such claim would be subject to arbitration under this arbitration agreement to the extent permitted by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In any arbitration conducted under this provision, each party will bear his, her or its own fees, expenses and costs associated with the arbitration, provided that, to the extent applicable law requires Choice to pay any of Employee's portion of the fees, expenses and costs of the AAA and the arbitrator to make the arbitration agreement enforceable, Choice will pay or reimburse Employee for such fees, expenses and costs; and provided further, to the extent applicable law provides for the award of reasonable attorneys' fees and costs to the prevailing party, the arbitrator may award such fees and costs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)In the event any provision of this arbitration agreement is found to be unenforceable by an arbitrator or court, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision or deleted such that the enforceability of the remaining provisions remain unaffected. If the court or arbitrator declines to modify this arbitration agreement to render it enforceable, the parties agree to do so. This arbitration agreement shall be interpreted and construed under the Federal Arbitration Act and the Maryland Uniform Arbitration Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)By agreeing to arbitration, Choice and Employee do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award. In any such judicial action: (a) each of the parties irrevocably and unconditionally consents to the exclusive jurisdiction and venue of the federal or state courts located in Montgomery County, Maryland (the "<u>Maryland Courts</u>") for the purpose of any pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings, and to the non-exclusive jurisdiction of such courts for the enforcement of any judgment on any award; (b) each of the parties irrevocably waives, to the fullest extent they may effectively do so, any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens or any right of objection to jurisdiction on account of its place of incorporation or domicile, which it may now or hereafter have to the bringing of any such action or proceeding in any Maryland Court.

13.<u>Protected Rights</u>. Employee further understands that this Agreement does not limit Employee's ability to communicate with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("<u>Government Agencies</u>") or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Choice. Nothing in this Agreement prohibits or restricts Employee from exercising Employee's rights under the National Labor Relations Act, including rights under Section 7 of that Act. Further, notwithstanding Employee's confidentiality and nondisclosure obligations, Employee s hereby advised as follows pursuant to the Defend Trade Secrets Act: "An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

14.<u>Section 409A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The payments and benefits to be provided to Employee pursuant to this Agreement are intended to comply with, or be exempt from, Section 409A and will be interpreted, administered and operated in a manner consistent with that intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Notwithstanding the foregoing, Choice makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall Choice be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)For purposes of Section 409A, Employee's right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any payments to be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" within the meaning of Section 409A. Whether Employee has a separation from service will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Notwithstanding any other provision of this Agreement to the contrary, if at the time of Employee's separation from service, (i) Employee is a "specified employee" (within the meaning of Section 409A and using the identification methodology selected by Choice from time to time), and (ii) Choice makes a good faith determination that an amount payable on account of such separation from service to Employee constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the "<u>Delay</u> <u>Period</u>"), then Choice will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six-month period (or upon Employee's death, if earlier). To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A

------

provided on account of a "separation from service," and such benefits are not otherwise exempt from Section 409A, Employee shall pay the cost of such benefits during the Delay Period, and Choice shall reimburse Employee, to the extent that such costs would otherwise have been paid by Choice or to the extent that such benefits would otherwise have been provided by Choice at no cost to Employee, Choice's share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by Choice in accordance with the procedures specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)(i) Any amount for which Employee is entitled to be reimbursed under this Agreement will be reimbursed to Employee as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (ii) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

15.<u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)This Agreement contains the entire agreement of the parties, and supersedes all other agreements, discussions or understandings concerning the subject matter. It may be changed only by an agreement in writing signed by both parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Agreement shall be governed by the laws of the State of Maryland.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver.

------

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

CHOICE HOTELS INTERNATIONAL, INC.

By:____________________________________

Employee:

______________________________________

[Name]

------

EXHIBIT A

<u>RELEASE AGREEMENT</u>

This Release Agreement ("<u>Release Agreement</u>") is made as of ___________, 20__ by _________________ ("<u>Employee</u>") in favor of Choice Hotels International, Inc. and its subsidiaries (collectively "<u>Choice</u>").

WHEREAS, Employee and Choice have previously entered into a Non-Competition, Non-Solicitation and Severance Benefit Agreement dated ____________________ ("<u>Agreement</u>"); and

WHEREAS, in consideration for certain covenants and benefits under the Agreement, Employee is obligated to execute this Release Agreement upon termination of employment;

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Employee agrees to the following terms:

1.<u>Last Day Worked</u>. Employee's employment terminated, or will terminate, on ___________, 20__ ("<u>Termination Date</u>"). Employee will return to Choice, no later than the close of business on the Termination Date, any Choice property, including original and copied computer hardware or software, credit cards, long distance telephone cards, and keys or passcards to Choice buildings, and all other property in Employee's possession, custody or control.

2.<u>Release</u>. Employee agrees, in exchange for the benefits set forth in the Agreement, to irrevocably and unconditionally release Choice and its parents, subsidiaries and affiliated entities, and each of their respective officers, directors, shareholders, employees, agents, representatives, insurers, attorneys, employee welfare benefit plans and pension or deferred compensation plans under Section 401 of the Internal Revenue Code of 1954, as amended, and their trustees, administrators and other fiduciaries; and all persons acting by, through, under or in concert with them, and each of their predecessors, successors and assigns or any of them (collectively "<u>Choice</u> <u>Releasees</u>"), of and from any and all manner of action or actions, cause or causes of action, in law or equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, grievances, damages, loss, cost or expense, of any nature, known or unknown, fixed or contingent, which Employee now has or may later have against the Choice Releasees, or any one of them, by reason of any matter, cause, or thing from the beginning of time to the Effective Date of this Agreement, including without limitation those arising out of, based on, or relating to the hire, employment, termination, remuneration (including any severance, salary, bonus, incentive or other compensation; vacation sick leave or medical insurance benefits; or any benefits from any employee stock ownership, profit-sharing and/or any deferred compensation plan under Section 401 of the Internal Revenue Code of 1954 ("<u>Claims</u>"). The Claims that Employee is releasing include, but are not limited to, a release of any rights or claims Employee may have under:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.the Age Discrimination in Employment Act, which prohibits age discrimination in employment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, national origin, religion or sex;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.the Civil Rights Act of 1991;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.the Equal Pay Act, which prohibits paying men and women unequal pay for equal work;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.the Americans with Disabilities Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.the Family and Medical Leave Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.and any other federal, state or local laws or regulations prohibiting employment discrimination, harassment or retaliation.

------

Employee also releases any Claims for wrongful discharge or breach of contract, Claims for any personal injury or tort, Claims for any compensation, benefits, expenses, bonuses, or any other employee rights or benefits, Claims for employment or reinstatement, Claims for attorneys' fees and costs, and all other Claims under any applicable statute, contract or other cause of action. This Agreement covers both Claims Employee knows about and those Employee may not know about. Employee assumes the risk of any and all unknown Claims which may exist at the time Employee signs this Agreement, and Employee agrees that this Agreement shall apply to any and all known and unknown Claims.

3.<u>No Release of Rights Under Agreement</u>. By signing this Release Agreement, Employee does not waive or release Employee's right to enforce the Agreement. Employee does not release claims for or rights to earned compensation, vested benefits or indemnification under Choice's bylaws.

4.<u>Lawsuits</u>. To the fullest extent permitted by law, Employee promises never to file a lawsuit, claim, complaint, charge, demand, administrative proceeding, agency action or any other legal proceeding (collectively "<u>Lawsuit</u>") asserting any Claims that are released in this Agreement. Employee agrees to withdraw with prejudice all Lawsuits, if any, Employee has filed against any Choice Releasee asserting any Claims with any agency or court. Employee also waives the right to seek or receive any monetary benefits with respect to Lawsuits asserted by administrative agencies or other third parties on Employee's behalf. Employee further agrees not to assist any other person in bringing any Lawsuit against any Choice Releasee, unless compelled to do so pursuant to a valid court order or subpoena. Except as permitted by Section 5 below, Employee agrees not to make any derogatory remarks or provide and disparaging information about any Choice Releasee. Employee agrees to reasonably assist Choice in any Lawsuit arising from circumstances that took place during Employee's employment, to the extent reasonably necessary to protect Choice's interests. Choice will reimburse Employee for all reasonable and necessary expenses Employee incurs in complying with the foregoing sentence, provided they are approved by Choice in writing prior to being incurred.

5.<u>Protected Rights</u>. Employee understands that nothing contained in this Agreement limits Employee's ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("<u>Government Agencies</u>"). Employee further understands that this Agreement does not limit Employee's ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Choice. This Agreement does not limit Employee's right to receive an award for information provided to any Government Agencies. Further, notwithstanding Employee's confidentiality and nondisclosure obligations, Employee s hereby advised as follows pursuant to the Defend Trade Secrets Act: "An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

6.<u>No Admission</u>. Employee agrees that this Release Agreement is not an admission of guilt or wrongdoing by the Choice Releasees, and Employee acknowledges that the Choice Releasees do not believe or admit that they have done anything wrong. Employee acknowledges that Employee has not suffered any wrongful treatment by any Choice Releasee.

7.<u>Continuing Obligations</u>. Employee acknowledges and reaffirms Employee's continuing obligations to Choice pursuant to any agreement containing post-employment obligations (e.g., confidentiality, non-disclosure, inventions assignment, non-competition, non-solicitation, and/or non-disparagement obligations), which obligations remain in full force and effect.

8.<u>Breach</u>. If Employee breaches this Release Agreement and files a Lawsuit against any Choice Releasee on Claims that Employee released in this Release Agreement, Employee agrees to pay for all costs incurred by the Choice Releasee, including reasonable attorneys' fees, in defending against Employee's Lawsuit. Employee further agrees not to assist any other person in bringing any Lawsuit against any Choice Releasee, unless compelled to do so pursuant to a valid subpoena or court order. If Employee breaches the promises in this Release Agreement, Choice may terminate all Severance Benefits under the Agreement that are still owed to Employee.

------

9.<u>Governing Law</u>. This Agreement is governed by Maryland law, without regard to the principles of conflicts of laws. If a dispute arises under this Agreement, any Lawsuit must be brought exclusively in the courts for Montgomery County, Maryland. Employee and Choice voluntarily submit to the jurisdiction and venue of said court.

10.<u>Binding</u>. Employee agrees and acknowledges this Release Agreement binds Employee's heirs, administrators, representatives, executors, successors, and assigns, and will inure to the benefit of all Choice Releasees and their respective heirs, administrators, representatives, executors, successors, and assigns.

11.<u>Severability</u>. Any invalidity, in whole or in part, of any provision of this Release Agreement shall not affect the validity of any other of its provisions.

12.<u>Period for Review and Consideration</u>. Employee has 21 days from the date Employee receives this Release Agreement to review and consider this document before signing it. Employee may use as much of this 21 day period as Employee wishes before signing this Release Agreement. Choice advises Employee to consult with an attorney at Employee's own expense before signing this Release Agreement; whether to do so is Employee's decision. If Employee wishes to sign this Release Agreement and thereafter be eligible to receive the Severance Benefits under the Agreement, Employee must deliver one fully executed original of this Release Agreement, to Choice Hotels International, 915 Meeting Street, North Bethesda, Maryland 20852, Chief Human Resources Officer, no later than the close of business on the 21st day after Employee receives this Release Agreement. Employee's failure to deliver timely the executed Release Agreement will nullify the Agreement, and Employee will not be entitled to receive the Severance Benefits.

13.<u>Revocation of Release Agreement</u>. Employee may revoke this Release Agreement within 7 days after signing it (not counting the date Employee signs) (the "<u>Revocation Period</u>"). If Employee wishes to revoke this Release Agreement after signing it, Employee must deliver a written notice of revocation to Choice Hotels International, 915 Meeting Street, North Bethesda, Maryland 20852, Attention: Chief Human Resources Officer. Choice must receive this revocation no later than the close of business on the 7th day after Employee signs this Release Agreement. If Employee revokes this Release Agreement, it shall not be effective or enforceable and Employee will not receive the Severance Benefits under the Agreement. This Agreement will not become effective or enforceable until such date that it is signed by both parties and the Revocation Period expires without Employee exercising Employee's right of revocation (the "<u>Effective Date</u>").

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO REVIEW AND CONSIDER THIS RELEASE AGREEMENT WITH AN ATTORNEY, AND THAT EMPLOYEE HAS HAD SUFFICIENT TIME TO CONSIDER IT. AFTER SUCH CAREFUL CONSIDERATION, EMPLOYEE KNOWINGLY AND VOLUNTARILY ENTERS INTO THIS RELEASE AGREEMENT WITH FULL UNDERSTANDING OF ITS MEANING AND EFFECT.

Employee:

______________________________

## Exhibit 10.28

&nbsp;&nbsp;&nbsp;&nbsp;

**Exhibit 10.28**

<u>Amendment to</u>

<u>Non-Competition, Non-Solicitation & Severance Benefit Agreement</u>

This Amendment, dated this 31<sup>st</sup> day of December 2025, amends that certain Non-Competition, Non-Solicitation & Severance Benefit Agreement (the "Agreement") entered into on March 6, 2017, between Choice Hotels International, Inc. ("Choice"), a Delaware corporation with principal offices at 915 Meeting Street, North Bethesda, Maryland 20852, and Dominic Dragisich ("Employee").

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree to the following terms:

1. Section 1 is amended by adding the following definition in alphabetical order:

&nbsp;&nbsp;&nbsp;&nbsp;"Code" means the Internal Revenue Code of 1986, as amended.

2. Section 8(a) is amended by adding to the end of the first sentence thereof the following language:

provided, however, that to the extent necessary to comply with Section 409A of the Code any amount that is determined not to be exempt from Section 409A shall be paid in installments in accordance with Choice's normal payroll practices as if it were Discretionary Pay.

3. Section 9(f) is amended and restated in its entirety as follows:

All amounts payable hereunder shall be subject to all applicable tax withholding.

4. The Agreement is amended to add a new Section 13, immediately before existing Section 13, which shall be renumbered Section 14, to read as follows:

Section 13. Section 409A

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The payments and benefits to be provided to Employee pursuant to this Agreement are intended to comply with, or be exempt from, Section 409A and will be interpreted, administered and operated in a manner consistent with that intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Notwithstanding the foregoing, Choice makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall Choice be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any payments to be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" within the meaning of Section 409A. Whether Employee has a separation from service will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding any other provision of this Agreement to the contrary, if at the time of Employee's separation from service, (i) Employee is a "specified employee" (within the meaning of Section 409A and using the identification methodology selected by Choice from time to time), and (ii) Choice makes a good faith determination that an amount payable on account of such separation from service to Employee constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the "<u>Delay Period</u>"), then Choice will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six-month period (or upon Employee's death, if earlier). To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a "separation from service," and

------

&nbsp;&nbsp;&nbsp;&nbsp;

such benefits are not otherwise exempt from Section 409A, Employee shall pay the cost of such benefits during the Delay Period, and Choice shall reimburse Employee, to the extent that such costs would otherwise have been paid by Choice or to the extent that such benefits would otherwise have been provided by Choice at no cost to Employee, Choice's share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by Choice in accordance with the procedures specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)(i) Any amount that Employee is entitled to be reimbursed for under this Agreement will be reimbursed to Employee as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (ii) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

5. The Section renumbered as Section 14 (previously entitled "Preservation of NLRA Rights") shall be amended and restated in its entirety as follows:

<u>Protected Rights</u>. Employee further understands that this Agreement does not limit Employee's ability to communicate with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("Government Agencies") or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Choice. Nothing in this Agreement prohibits or restricts Employee from exercising Employee's rights under the National Labor Relations Act, including rights under Section 7 of that Act. Further, notwithstanding Employee's confidentiality and nondisclosure obligations, Employee is hereby advised as follows pursuant to the Defend Trade Secrets Act: "An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

6. Each reference to "Section 9(f)" in Sections 6 and 8(b) shall be amended to read "Section 13".

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

CHOICE HOTELS INTERNATIONAL, INC.&nbsp;&nbsp;&nbsp;&nbsp;Employee

By: <u>/s/ Patrick Cimerola&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> &nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Dominic Dragisich&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

&nbsp;&nbsp;&nbsp;&nbsp;Patrick Cimerola, CHRO &nbsp;&nbsp;&nbsp;&nbsp;Dominic Dragisich

## Exhibit 10.29

&nbsp;&nbsp;&nbsp;&nbsp;

**Exhibit 10.29**

<u>Amendment to</u>

<u>Non-Competition, Non-Solicitation & Severance Benefit Agreement</u>

This Amendment, dated this 31<sup>st</sup> day of December 2025, amends that certain Non-Competition, Non-Solicitation & Severance Benefit Agreement (the "Agreement") entered into on April 7, 2023, between Choice Hotels International, Inc. ("Choice"), a Delaware corporation with principal offices at 915 Meeting Street, North Bethesda, Maryland 20852, and David Pepper ("Employee").

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree to the following terms:

1. Section 1 is amended by adding the following definition in alphabetical order:

&nbsp;&nbsp;&nbsp;&nbsp;"Code" means the Internal Revenue Code of 1986, as amended.

2. Section 8(a) is amended by adding to the end of the first sentence thereof the following language:

provided, however, that to the extent necessary to comply with Section 409A of the Code any amount that is determined not to be exempt from Section 409A shall be paid in installments in accordance with Choice's normal payroll practices as if it were Discretionary Pay.

3. Section 9(f) is amended and restated in its entirety as follows:

All amounts payable hereunder shall be subject to all applicable tax withholding.

4. The Agreement is amended to add a new Section 13, immediately before existing Section 13, which shall be renumbered Section 14, to read as follows:

Section 13. Section 409A

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The payments and benefits to be provided to Employee pursuant to this Agreement are intended to comply with, or be exempt from, Section 409A and will be interpreted, administered and operated in a manner consistent with that intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Notwithstanding the foregoing, Choice makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall Choice be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any payments to be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" within the meaning of Section 409A. Whether Employee has a separation from service will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding any other provision of this Agreement to the contrary, if at the time of Employee's separation from service, (i) Employee is a "specified employee" (within the meaning of Section 409A and using the identification methodology selected by Choice from time to time), and (ii) Choice makes a good faith determination that an amount payable on account of such separation from service to Employee constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the "<u>Delay Period</u>"), then Choice will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six-month period (or upon Employee's death, if earlier). To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a "separation from service," and

------

&nbsp;&nbsp;&nbsp;&nbsp;

such benefits are not otherwise exempt from Section 409A, Employee shall pay the cost of such benefits during the Delay Period, and Choice shall reimburse Employee, to the extent that such costs would otherwise have been paid by Choice or to the extent that such benefits would otherwise have been provided by Choice at no cost to Employee, Choice's share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by Choice in accordance with the procedures specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)(i) Any amount that Employee is entitled to be reimbursed for under this Agreement will be reimbursed to Employee as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (ii) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

5. The Section renumbered as Section 14 (previously entitled "Preservation of NLRA Rights") shall be amended and restated in its entirety as follows:

<u>Protected Rights</u>. Employee further understands that this Agreement does not limit Employee's ability to communicate with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("Government Agencies") or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Choice. Nothing in this Agreement prohibits or restricts Employee from exercising Employee's rights under the National Labor Relations Act, including rights under Section 7 of that Act. Further, notwithstanding Employee's confidentiality and nondisclosure obligations, Employee is hereby advised as follows pursuant to the Defend Trade Secrets Act: "An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

6. Each reference to "Section 9(f)" in Sections 6 and 8(b) shall be amended to read "Section 13".

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

CHOICE HOTELS INTERNATIONAL, INC.&nbsp;&nbsp;&nbsp;&nbsp;Employee

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ Patrick Cimerola&nbsp;&nbsp;&nbsp;&nbsp;</u> &nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ David Pepper</u> 

&nbsp;&nbsp;&nbsp;&nbsp;Patrick Cimerola, CHRO&nbsp;&nbsp;&nbsp;&nbsp; David Pepper

## Exhibit 10.30

&nbsp;&nbsp;&nbsp;&nbsp;

**Exhibit 10.30**

<u>Amendment to</u>

<u>Non-Competition, Non-Solicitation & Severance Benefit Agreement</u>

This Amendment, dated this 31<sup>st</sup> day of December 2025, amends that certain Non-Competition, Non-Solicitation & Severance Benefit Agreement (the "Agreement") entered into on March 26, 2020, between Choice Hotels International, Inc. ("Choice"), a Delaware corporation with principal offices at 915 Meeting Street, North Bethesda, Maryland 20852, and Scott Oaksmith ("Employee").

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree to the following terms:

1. Section 1 is amended by adding the following definition in alphabetical order:

&nbsp;&nbsp;&nbsp;&nbsp;"Code" means the Internal Revenue Code of 1986, as amended.

2. Section 8(a) is amended by adding to the end of the first sentence thereof the following language:

provided, however, that to the extent necessary to comply with Section 409A of the Code any amount that is determined not to be exempt from Section 409A shall be paid in installments in accordance with Choice's normal payroll practices as if it were Discretionary Pay.

3. Section 9(f) is amended and restated in its entirety as follows:

All amounts payable hereunder shall be subject to all applicable tax withholding.

4. The Agreement is amended to add a new Section 13, immediately before existing Section 13, which shall be renumbered Section 14, to read as follows:

Section 13. Section 409A

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The payments and benefits to be provided to Employee pursuant to this Agreement are intended to comply with, or be exempt from, Section 409A and will be interpreted, administered and operated in a manner consistent with that intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Notwithstanding the foregoing, Choice makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall Choice be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any payments to be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" within the meaning of Section 409A. Whether Employee has a separation from service will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding any other provision of this Agreement to the contrary, if at the time of Employee's separation from service, (i) Employee is a "specified employee" (within the meaning of Section 409A and using the identification methodology selected by Choice from time to time), and (ii) Choice makes a good faith determination that an amount payable on account of such separation from service to Employee constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the "<u>Delay Period</u>"), then Choice will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six-month period (or upon Employee's death, if earlier). To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a "separation from service," and

------

&nbsp;&nbsp;&nbsp;&nbsp;

such benefits are not otherwise exempt from Section 409A, Employee shall pay the cost of such benefits during the Delay Period, and Choice shall reimburse Employee, to the extent that such costs would otherwise have been paid by Choice or to the extent that such benefits would otherwise have been provided by Choice at no cost to Employee, Choice's share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by Choice in accordance with the procedures specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)(i) Any amount that Employee is entitled to be reimbursed for under this Agreement will be reimbursed to Employee as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (ii) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

5. The Section renumbered as Section 14 (previously entitled "Preservation of NLRA Rights") shall be amended and restated in its entirety as follows:

<u>Protected Rights</u>. Employee further understands that this Agreement does not limit Employee's ability to communicate with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("Government Agencies") or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Choice. Nothing in this Agreement prohibits or restricts Employee from exercising Employee's rights under the National Labor Relations Act, including rights under Section 7 of that Act. Further, notwithstanding Employee's confidentiality and nondisclosure obligations, Employee is hereby advised as follows pursuant to the Defend Trade Secrets Act: "An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

6. Each reference to "Section 9(f)" in Sections 6 and 8(b) shall be amended to read "Section 13".

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

CHOICE HOTELS INTERNATIONAL, INC.&nbsp;&nbsp;&nbsp;&nbsp;Employee

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ Patrick Cimerola &nbsp;&nbsp;&nbsp;&nbsp;</u> &nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ Scott Oaksmith &nbsp;&nbsp;&nbsp;&nbsp;</u> 

&nbsp;&nbsp;&nbsp;&nbsp;Patrick Cimerola, CHRO&nbsp;&nbsp;&nbsp;&nbsp;Scott Oaksmith

## Exhibit 10.31

&nbsp;&nbsp;&nbsp;&nbsp;

**Exhibit 10.31**

<u>Amendment to</u>

<u>Non-Competition, Non-Solicitation & Severance Benefit Agreement</u>

This Amendment, dated this 31<sup>st</sup> day of December 2025, amends that certain Non-Competition, Non-Solicitation & Severance Benefit Agreement (as amended, the "Agreement") entered into on February 13, 2012, and amended on March 25, 2013, between Choice Hotels International, Inc. ("Choice"), a Delaware corporation with principal offices at 915 Meeting Street, North Bethesda, Maryland 20852, and Simone Wu ("Employee").

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree to the following terms:

1. Section 1 is amended by adding the following definition in alphabetical order:

&nbsp;&nbsp;&nbsp;&nbsp;"Code" means the Internal Revenue Code of 1986, as amended.

2. Section 8(a) is amended by adding to the end of the first sentence thereof the following language:

provided, however, that to the extent necessary to comply with Section 409A of the Code any amount that is determined not to be exempt from Section 409A shall be paid in installments in accordance with Choice's normal payroll practices as if it were Discretionary Pay.

3. Section 9(f) is amended and restated in its entirety as follows:

All amounts payable hereunder shall be subject to all applicable tax withholding.

4. The Agreement is amended to add a new Section 13, immediately before existing Section 13, which shall &nbsp;&nbsp;&nbsp;&nbsp;be renumbered Section 14, to read as follows:

Section 13. Section 409A

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The payments and benefits to be provided to Employee pursuant to this Agreement are intended to comply with, or be exempt from, Section 409A and will be interpreted, administered and operated in a manner consistent with that intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Notwithstanding the foregoing, Choice makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall Choice be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any payments to be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" within the meaning of Section 409A. Whether Employee has a separation from service will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding any other provision of this Agreement to the contrary, if at the time of Employee's separation from service, (i) Employee is a "specified employee" (within the meaning of Section 409A and using the identification methodology selected by Choice from time to time), and (ii) Choice makes a good faith determination that an amount payable on account of such separation from service to Employee constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the "<u>Delay Period</u>"), then Choice will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six-month period (or upon Employee's death, if earlier). To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a "separation from service," and

------

&nbsp;&nbsp;&nbsp;&nbsp;

such benefits are not otherwise exempt from Section 409A, Employee shall pay the cost of such benefits during the Delay Period, and Choice shall reimburse Employee, to the extent that such costs would otherwise have been paid by Choice or to the extent that such benefits would otherwise have been provided by Choice at no cost to Employee, Choice's share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by Choice in accordance with the procedures specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)(i) Any amount that Employee is entitled to be reimbursed for under this Agreement will be reimbursed to Employee as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (ii) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

5. The Section renumbered as Section 14 (previously entitled "Preservation of NLRA Rights") shall be amended and restated in its entirety as follows:

<u>Protected Rights.</u> Employee further understands that this Agreement does not limit Employee's ability to communicate with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("Government Agencies") or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Choice. Nothing in this Agreement prohibits or restricts Employee from exercising Employee's rights under the National Labor Relations Act, including rights under Section 7 of that Act. Further, notwithstanding Employee's confidentiality and nondisclosure obligations, Employee is hereby advised as follows pursuant to the Defend Trade Secrets Act: "An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

6. Each reference to "Section 9(f)" in Sections 6 and 8(b) shall be amended to read "Section 13".

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

CHOICE HOTELS INTERNATIONAL, INC.&nbsp;&nbsp;&nbsp;&nbsp;Employee

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ Patrick Cimerola</u> &nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ Simone Wu&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> 

&nbsp;&nbsp;&nbsp;&nbsp;Patrick Cimerola, CHRO&nbsp;&nbsp;&nbsp;&nbsp;Simone Wu

## Exhibit 21.01

**Exhibit 21.01**

**SUBSIDIARIES OF CHOICE HOTELS INTERNATIONAL, INC.**

**Choice Hotels International, Inc., a Delaware corporation, had the domestic and international subsidiaries shown below as of December 31, 2025. Certain U.S. subsidiaries are not named because they were not significant in the aggregate. Choice Hotels International, Inc. has no parent.**

---

| | |
|:---|:---|
| **<u>Name of Subsidiary</u>** | **<u>Jurisdiction of Organization</u>** |
| AF Holding Subsidiary Corporation | Delaware |
| Bloomington CIS, LLC | Delaware |
| Cambria Hotels Management LLC | Delaware |
| CAM Bloomington 2021 LLC | Delaware |
| CH 32 W. Randolph LLC | Delaware |
| CH Avion Burbank LLC | Delaware |
| CH Bend LLC | Delaware |
| CH Brighton Denver LLC | Delaware |
| CH Broad Street LLC | Delaware |
| CH FW Rosedale LLC | Delaware |
| CH Lady Street Columbia LLC | Delaware |
| CH Portland Park LLC | Delaware |
| Choice Hotels (Barbados) 1, SRL | Barbados |
| Choice Hotels (Barbados) 2, SRL | Barbados |
| Choice Hotels Asia-Pac Pty. Ltd. | Australia |
| Choice Hotels Canada, Inc. | Canada |
| Choice Hotels de Mexico de R.L. de C.V. | Mexico |
| Choice Hotels France S.A.S. | France |
| Choice Hotels Franchise GmbH | Germany |
| Choice Hotels Insurance Agency, LLC | Maryland |

---

------

---

| | |
|:---|:---|
| Choice Hotels International Services Corp. | Delaware |
| Choice Hotels Licensing B.V. | Netherlands |
| CIS MOA Management, LLC | Maryland |
| CS 433 Mason LLC | Delaware |
| CS Centre Ave, Pittsburgh LLC | Delaware |
| CS HPB, LLC | Delaware |
| CS White Plains LLC | Delaware |
| CS WO LLC | Delaware |
| EH Amarillo Property Owner LLC | Delaware |
| EH Bastrop LLC | Delaware |
| EH Bowling Green LLC | Delaware |
| EH Brownsville Property Owner LLC | Delaware |
| EH BB Fayetteville LLC | Delaware |
| EH Buckeye Property Owner LLC | Delaware |
| EH Casa Grande LLC | Delaware |
| EH Cheyenne Property Owner LLC | Delaware |
| EH Clarksville Property Owner LLC | Delaware |
| EH El Paso Property Owner LLC | Delaware |
| EH Facility JV, LLC | Delaware |
| EH Facility Borrower, LLC | Delaware |
| EH Georgetown I-35 LLC | Delaware |
| EH Glendale Property Owner LLC | Delaware |
| EH ML North Dayton LLC | Delaware |
| EH Nampa Property Owner LLC | Delaware |

---

------

---

| | |
|:---|:---|
| EH Portsmouth LLC | Delaware |
| EH Rochester LLC | Delaware |
| EH Salem Property Owner LLC | Delaware |
| EH San Antonio Hunt Lane LLC | Delaware |
| EH Somerset LLC | Delaware |
| EH Waco Property Owner LLC | Delaware |
| EH Wichita Property Owner LLC | Delaware |
| EH Yuma Property Owner LLC | Delaware |
| FC 632 TCHOUP LLC | Delaware |
| FC EL Segundo LLC | Delaware |
| LIBOR Management LLC | Minnesota |
| Quality Hotels Limited | United Kingdom |
| Radisson Blu MOA, LLC | Delaware |
| Radisson Blu MOA Management, LLC | Delaware |
| Radisson Chicago MP Management, LLC | Maryland |
| Radisson Hospitality, LLC | Minnesota |
| Radisson Hotels Canada, ULC | Canada |
| RD LaCrosse Management, LLC | Maryland |
| RR MPLS Management, LLC | Maryland |
| RR MPLS DT, LLC | Delaware |
| 68 East Avenue Austin, LLC | Delaware |
| 926 James M Wood Boulevard LLC | Delaware |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Ex-23

**Exhibit 23**

**Consent of Independent Registered Public Accounting Firm**

We consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Registration Statement (Form S-3 No. 333-273925) of Choice Hotels International, Inc., and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Registration Statements (Forms S-8 No. 333-287304, No. 333-223424, No. 333-217493, No. 333-41357, No. 333-193403, No. 333-169308, No. 333-142676, No. 333-106218, No. 333-38942, No. 333-67737, No. 333-41355, and No. 333-36819) of Choice Hotels International, Inc.;

of our reports dated February 19, 2026 with respect to the consolidated financial statements and schedule of Choice Hotels International, Inc. and the effectiveness of internal control over financial reporting of Choice Hotels International, Inc. included in this Annual Report (Form 10-K) of Choice Hotels International, Inc. for the year ended December 31, 2025.

/s/ Ernst & Young LLP

Tysons, Virginia

February 19, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Patrick S. Pacious, certify that:

1. I have reviewed this annual report on Form 10-K of Choice Hotels International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 19, 2026 | /s/ Patrick S. Pacious |
| | | **Patrick S. Pacious** |
| | | **President and Chief Executive Officer** |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Scott E. Oaksmith, certify that:

1. I have reviewed this annual report on Form 10-K of Choice Hotels International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 19, 2026 | /s/ Scott E. Oaksmith |
| | | **Scott E. Oaksmith** |
| | | **Chief Financial Officer** |

---

## Ex-32

**Exhibit 32**

**WRITTEN STATEMENT**

**OF**

**CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER**

The undersigned hereby certify that the Annual Report on Form 10-K for the year ended December 31, 2025 filed by Choice Hotels International, Inc. with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

Dated: February 19, 2026

---

| |
|:---|
| /s/ Patrick S. Pacious |
| **Patrick S. Pacious** |
| **Chief Executive Officer and President** |
| /s/ Scott E. Oaksmith |
| **Scott E. Oaksmith** |
| **Chief Financial Officer** |

---

<br>