Why can't Embassy Suites estimate pre-conversion expenses for a franchisee converting an existing hotel?

According to Embassy Suites's 2025 Franchise Disclosure Document, estimating pre-conversion expenses for franchisees converting an existing hotel is not feasible due to the numerous variables involved. These expenses, which include additional personnel training, sales, administrative and general costs, project management, technical services, advertising, security and utility deposits, and opening festivities, are highly dependent on the specific characteristics of the existing hotel being converted.

The FDD emphasizes that the actual costs for a conversion project are influenced by factors such as the hotel's age, physical structure, and the quality of its furnishings. Given that each existing hotel presents a unique set of conditions, Embassy Suites cannot provide a reliable average cost estimate. This lack of predictability makes it difficult for prospective franchisees to budget accurately for these pre-conversion expenses.

While Embassy Suites cannot provide a specific estimate, the FDD does advise franchisees to assume that contingencies, referring to unanticipated construction cost overruns and other unexpected expenses, will be at least 10% of construction costs. This provides a general guideline for franchisees to account for potential unforeseen costs during the conversion process. Prospective franchisees should conduct thorough independent investigations to assess the specific costs associated with their conversion project before signing the Franchise Agreement.