For which brand is HSM the required procurement agency, besides Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
e to franchisees of certain items, such as coffee, soft drinks, cleaning compounds, and paper products.
In addition, for two of our brands, LivSmart Studios by Hilton and Tru by Hilton, HSM is an optional approved procurement agency and may receive fees for providing procurement services. For one of our other brands, Spark by Hilton, HSM is the required procurement service provider.For the fiscal year ended December 31, 2024, HSM had revenues of $19,614,010 in rebates and allowances on purchases made by franchisees of all of our brands.
For the fiscal year ended December 31, 2024, HSM had revenues from sales of goods, services and/or supplies to franchisees of all of our brands of $8,763,692. In addition, HSM receives cash discounts for early payment on orders it places with manufacturers and suppliers to fill purchase orders placed with it by franchisees of all of our brands.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 45–50)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, HSM is the required procurement service provider for Spark by Hilton. For LivSmart Studios by Hilton and Tru by Hilton, HSM is an optional approved procurement agency. HSM negotiates pricing and purchasing terms with manufacturers and suppliers for the benefit of the Hilton system.
HSM, a wholly-owned subsidiary of Hilton, negotiates with third-party manufacturers and suppliers for the distribution of hotel furniture, furnishings, fixtures, finishes, equipment and supplies, certain food and beverage supplies, and certain hotel services. Franchisees may, but are not obligated to, purchase specified items from HSM or such third parties, except as described in the FDD.
For the fiscal year ended December 31, 2024, HSM had revenues of $19,614,010 in rebates and allowances on purchases made by franchisees of all of Hilton's brands. During that same period, HSM had revenues from sales of goods, services and/or supplies to franchisees of all of Hilton's brands of $8,763,692 and revenues of $38,697,912 in administrative fees on purchases made by franchisees of all of Hilton's brands.