Choice Hotels Acquires Suburban Franchise Systems, Inc. For Approximately $10.5 Million

Choice Hotels International, Inc. (NYSE:CHH) today announced it has acquired Suburban Franchise Holding Company, Inc., and its subsidiary, Suburban Franchise Systems, Inc. With the addition of the 67-property Suburban Extended Stay Hotels chain to the Choice system, Choice enters the economy extended-stay lodging segment and immediately becomes its largest franchisor with nearly 9,000 rooms online. "This acquisition allows Choice to enter a new segment, building on the excellent reputation and performance of the Suburban brand and the expertise we have gained through our mid-scale extended stay MainStay Suites brand," said Charles A. Ledsinger, Jr., president and chief executive officer of Choice Hotels. "The economy extended-stay segment has strong supply-side potential and a solid track record for providing above-average returns for hoteliers. Last year the segment achieved an average occupancy percentage in the mid 70s compared to 61% for the overall US hotel average." He added, "As we combine Suburban's strong product and brand name with our highly effective global marketing and reservations system, as well as our focused extended stay services and technology infrastructure, we provide both existing Suburban owners and new developers an opportunity for a very compelling return on investment." The purchase price was approximately $10.5 million (consisting of $8.0 million in cash and approximately $2.5 million of liabilities) with up to an additional $5.0 million payable over the next three years, contingent upon meeting certain development targets. The company said that the transaction is expected to add up to 2 cents to diluted earnings per share in 2006. As part of the agreement, Kevin J. Lewis, president and chief executive officer of Suburban Franchise Systems, will join Choice as vice president, extended stay, with responsibility for the MainStay Suites and Suburban brands. "The Suburban franchisees, who also were the owners of the company, are excited about the opportunity to join Choice and to build upon our success," said Lewis. "Working together, we believe we can truly maximize the brand's outstanding potential." With the completion of this acquisition, Suburban Extended Stay Hotels becomes the tenth brand in the Choice Hotels system. About Choice Hotels International Choice Hotels International is one of the world's largest lodging franchisors, marketing more than 5,000 hotels open or under development in more than 40 countries under the Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, MainStay Suites, Econo Lodge, Rodeway Inn and Suburban Extended Stay Hotels brand names. Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law. Such statements are based on management's beliefs, assumptions and expectations, which in turn are based on information currently available to management. . Contact: Choice Hotels International Joseph M. Squeri EVP Operations and Chief Financial Officer Tel: 301-592-5006 http://www.choicehotels.com

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