What was the amount recognized as a reduction of franchise royalty fees for Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| (in thousands) | |
|---|---|
| Contract acquisition costs $ 376,063 $ (69,820) $ 306,243 | |
| Franchise contract intangible assets acquired 85,304 (3,317) 81,987 | |
| Costs to obtain contracts 7,259 (2,741) 4,518 | |
| $ 468,626 $ (75,878) $ 392,748 | |
| Contract acquisition costs $ 287,958 $ (54,374) $ 233,584 | |
| Costs to obtain contracts 7,256 (2,307) 4,949 | |
| $ 295,214 $ (56,681) $ 238,533 | |
| Recognized as a reduction of franchise royalty fees $ 16,053 $ 12,897 $ 11,972 |
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the amount recognized as a reduction of franchise royalty fees is detailed in Item 23, Receipts. The figures provided show the amounts recognized as a reduction of franchise royalty fees across three unspecified periods are $16,053, $12,897, and $11,972. These figures likely represent different accounting periods (e.g., monthly, quarterly, or annual).
For a prospective Embassy Suites franchisee, this indicates that there are mechanisms in place that can lead to a reduction in the standard royalty fees. Understanding the conditions under which these reductions are applied is crucial. Franchisees should inquire about what factors contribute to these reductions, such as performance metrics, marketing contributions, or temporary fee waivers during specific circumstances like property improvements or economic downturns.
It's important to note that the FDD excerpt does not specify the exact periods to which these figures apply, nor does it detail the reasons for the reductions. Therefore, potential franchisees should seek clarification from Embassy Suites regarding the specifics of these royalty fee reductions, including the eligibility criteria and the duration for which these reductions are applicable. This information will help in accurately forecasting potential costs and revenues associated with operating an Embassy Suites franchise.