What were the costs incurred by Delta Hotels By Marriott to obtain contracts with customers in 2023?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
ets for information on capitalized costs incurred to obtain contracts with customers.
Related Party Transactions
Related party transactions are the result of transactions with and between subsidiaries of Marriott. Transactions are classified as current or non-current assets and liabilities depending on the original maturity terms of the transaction. Non-current assets and liabilities are transactions with original maturities greater than one year. Transactions with related party entities resulting in both receivables from and payables to an individual related party entity as of the balance sheet date are presented on a net basis. Due from related parties, net for the years ended December 31, 2024 and 2023, was $443,571 and $376,990, respectively. The related party transactions are classified as non-current.
The related party transactions incurred interest
Source: Item 7 — Franchisor reserves the right to challenge the applicability of any law that declares provisions in the Agreement void or unenforceable. (FDD pages 288–363)
What This Means (2025 FDD)
According to Delta Hotels By Marriott's 2025 Franchise Disclosure Document, the company capitalizes incremental costs incurred to acquire franchise and license agreements, which are then reimbursed through a related party payable. These costs are recorded as "Intangible assets, net" on the balance sheets and amortized on a straight-line basis over the initial term of the agreements, which range from 10 to 30 years. The amortization is reflected in the "Contract investment amortization" and "Cost reimbursement revenue" captions of the income statements.
The FDD states that for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, corporate allocation costs were $1,712, $1,284, and $1,396, respectively. However, the document does not explicitly state the specific costs incurred to obtain contracts with customers for the year 2023.
While the FDD provides information on how Delta Hotels By Marriott accounts for these costs and mentions corporate allocation costs for 2023, it does not disclose the exact amount of costs incurred to obtain contracts with customers in 2023. A prospective franchisee should ask Delta Hotels By Marriott for a detailed breakdown of these costs to better understand the financial obligations and how they are accounted for.