What costs is Embassy Suites responsible for if they delay the Refresh?

According to Embassy Suites' 2025 Franchise Disclosure Document, if a franchisee fails to meet the franchisor's timeline for the Refresh program, which includes specific order dates for equipment and software, the franchisee will be responsible for all fees and costs associated with the delay. These costs include, but are not limited to, any rent extension costs on Network Authorized Equipment and higher fees and costs for both equipment and software maintenance. The Refresh program involves the replacement or refreshment of Network Authorized Equipment, typically on an approximate three-year cycle, starting about three years after the initial equipment shipment.

This means that Embassy Suites franchisees need to adhere strictly to the timelines set by HSS (the franchisor) for equipment and software upgrades. Failing to do so can result in unexpected expenses, such as increased rent for the existing Network Authorized Equipment and higher maintenance fees for both the equipment and software. These costs can potentially impact the profitability of the franchise if not managed carefully.

For a prospective Embassy Suites franchisee, it is crucial to understand the Refresh program's timelines and budget accordingly. Franchisees should communicate proactively with Embassy Suites to ensure they are aware of all deadlines and requirements. Additionally, franchisees should factor in potential costs associated with delays as part of their financial planning to avoid any surprises and maintain smooth operations.