A total of 14 Value Place properties are up and running, eight of which are owned by franchisees and six of which are corporate owned. Another 11 properties are under construction, and an additional 38 are set to break ground in the next 90 days. By the end of 2006, executives of the three-year-old company expect to have nearly 60 franchise and corporate-owned properties open.

Value Place is a "short-term residential" hotel-apartment hybrid that can operate with as few as four full-time equivalent employees. The founder, DeBoer, previously founded the Residence Inn, Summerfield Suites and Candlewood Suites brands. Basic unit amenities include cable or satellite TV, kitchens and biweekly housekeeping. Residents can purchase additional services—such as housekeeping, dishes, cookware and high-speed Internet--on an ala carte basis.

Depending on the market, rooms are priced between $150 and $300 per week (seven days). Value Place president and franchisee Gina-Lynne Scharoun tells GlobeSt.com the price is well below the weekly rates of similarly positioned properties, the only national version of which is Extended Stay America.

Scharoun tells GlobeSt.com that both their franchisees and guests are different than originally expected. Due to a relatively fool-proof concept, Scharoun tells GlobeSt.com that only 20% of the franchisees have a history in the hotel business. "There's a former owner of a successful regional tuxedo chain, a gentleman who used to run a regional auto dealership, a homebuilder," she says. "They are typically former business owners and their similarity is their entrepreneurial nature; beyond that, they are as diverse as the day is long."

As for the guests, Scharoun says they expected more of a blue-collar crowd and are finding instead that it's attracting a more white-collar business traveler. "They're finding they don't have to pay mid-market prices in order to get a place that is clean and safe," she says. "We're marrying those words: low-cost, clean and safe."

With regard to safety, Scharoun says the business model includes multiple strategies to combat the low-price image and manage the type of guests they attract. In addition to being new properties, which helps, Scharoun says there is obvious video surveillance at every entrance and guests must have their driver's license scanned and provide a $100 deposit. They can also be evicted quite readily because the stay does not constitute a landlord-tenant relationship that exists in the apartment industry, says Scharoun.

The equity needed to launch a property ranges from $600,000 to $1 million, says Scharoun. The franchise fee is the greater of $31,500 or $300 per room developed. Ongoing fees include a 5% royalty on room revenues and marketing fund fee of up to 2.5% of room revenues, though the Value Place website says that fee is currently being waived.

Last week, Columbia, SC-based CC Development Group broke ground for a 121-unit Value Place property near Fort Jackson in Elgin, SC, a northeast suburb of Columbia. Room rates will be $179 weekly.

The property is one of three Value Place properties CC Development plans to open in the Columbia area. The second property will be in West Columbia, at the intersection of US Highway 378 and Interstate 26. The location for the third has not yet been determined. The company also plans to add Value Place properties in Lynchburg, VA and Greenville, SC.