What was the change in current intercompany payables for Embassy Suites in 2024?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| Operating Activities: | ||||||
| Net income | $ | 1,487,571 | $ | 1,372,281 | $ | 1,233,442 |
| Adjustments to reconcile net income to net cash provided by operating | ||||||
| activities: | ||||||
| Amortization of contract acquisition costs | 16,053 | 12,897 | 11,972 | |||
| Amortization expense | 3,751 | 414 | 410 | |||
| Franchise contract acquisition costs, net of refunds | (81,063) | (37,185) | (41,991) | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (7,971) | (5,787) | (8,139) | |||
| Other receivables due from Hilton affiliates | 64,535 | 30,383 | 335,087 | |||
| Other current assets | (2,269) | (54) | (23) | |||
| Other current liabilities | 5 | 10 | (1,542) | |||
| Change in other non-current assets | (7) | 85 | (3) | |||
| Change in deferred revenues | 34,651 | 46,130 | 42,148 | |||
| Change in other long-term liabilities | (5,568) | 5,405 | (62) | |||
| Decrease (increase) in due from Hilton affiliates related to franchise | 387 | (73) | 2,707 | |||
| deposits | ||||||
| Increase (decrease) in franchise deposits | (387) | 73 | (2,707) | |||
| Change in current intercompany payables | 4,690 | — | — |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the change in current intercompany payables in 2024 was $4,690. This represents the net change in the amount owed between Embassy Suites and its affiliated companies during the specified period.
Intercompany payables arise from transactions between Embassy Suites and its parent company, Hilton, or other Hilton affiliates. These transactions can include services provided, expenses paid on behalf of each other, or other financial arrangements. The increase suggests that Embassy Suites's payables to its affiliates increased during the year.
For a prospective franchisee, understanding intercompany transactions is crucial because they can impact the financial performance and cash flow of the franchise. While a change of $4,690 might seem small, it's important to consider the overall context of these transactions and how they might affect the franchisee's relationship with the parent company. Franchisees should seek clarification from Embassy Suites regarding the nature and terms of these intercompany transactions to fully understand their financial implications.