What is the consideration for the eforea Spa Amendment between Hilton and the Embassy Suites franchisee?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
uirements.
- (a) Subsection 5.1.1 of the Franchise Agreement is deleted and replaced with the following:
- 5.1.1 after the Opening Date, operate the Hotel twenty-four (24) hours a day; provided, however, you will operate the eforea spa for those days of the week and hours of the day that we may periodically establish;
- (b) Subsection 5.1.27 of the Franchise Agreement is amended by deleting the word "and" after the semicolon,
- (c) Subsection 5.1.28 of the Franchise Agreement is amended by changing the period to a semicolon and adding the following subparagraphs:
- 5.1.29 the Opening Date for the eforea spa must be within twelve (12) months of the Effective Date of the eforea Amendment;
- 5.1.30 after the Opening Date, operate the eforea spa for those days of the week and hours of the day as we may establish;
- 5.1.31 you must display all material, including brochures and promotional materials we provide for eforea spas, and allow advertising and promotion of eforea spas on y
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, an Embassy Suites franchisee must pay certain fees to operate an eforea spa. Specifically, the franchisee will pay Hilton an initial fee of $25,000 upon execution of the eforea Spa Amendment. This initial fee is consideration for the grant of the right to operate the eforea spa. Embassy Suites considers this initial fee fully earned upon execution of the amendment, and it is non-refundable.
In addition to the initial fee, the franchisee will also pay a spa royalty fee. This royalty is equal to two percent of the Gross Spa Revenue, which is defined as all revenue from services and retail sales of products from the eforea spa, less amounts for spa rebates and overcharges, but does not include any sales or other taxes collected directly from spa customers or any revenue derived from food and beverage sales from the eforea spa. This royalty fee is added to the Monthly Royalty Fee but is only payable on Gross Spa Revenue.
The 2025 Embassy Suites FDD specifies that the spa royalty fee will be due, and Hilton will have all rights related to this fee as set forth in the Franchise Agreement related to the Monthly Royalty Fee. This spa royalty fee is paid in addition to any other fees set forth in the Franchise Agreement. The franchisee must also operate the eforea spa for those days of the week and hours of the day that Embassy Suites may periodically establish.