What is the definition of 'Mandatory Guest Fee' for an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
"Mandatory Guest Fee" means any separate fee that a patron or guest is charged for in addition to the base room rate for a guest room, including but not limited to resort fees, facility fees, destination fees, amenity fees, urban destination fees, or any other similar fee. Mandatory Guest Fees do not include employee gratuities, state or local mandatory taxes, and other tax-like fees and assessments that are levied on a stay, as determined by us, that are passed through to a third party (such as tourism public improvement district fees, tourism or improvement assessments, and convention center fees).
Source: Item 6 — OTHER FEES (FDD pages 27–41)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, a 'Mandatory Guest Fee' is defined as any separate fee charged to a patron or guest in addition to the base room rate. This encompasses various fees, including resort fees, facility fees, destination fees, amenity fees, and urban destination fees, or any other similar fee.
For a prospective Embassy Suites franchisee, understanding this definition is crucial because these fees are included when calculating 'Gross Rooms Revenue,' which directly impacts the Monthly Royalty Fees owed to the franchisor. It is important to note that while these fees are included in Gross Rooms Revenue, certain charges are excluded from the definition of 'Mandatory Guest Fees.'
Specifically, employee gratuities, state or local mandatory taxes, and other tax-like fees and assessments levied on a stay and passed through to a third party (such as tourism public improvement district fees, tourism or improvement assessments, and convention center fees) are not considered Mandatory Guest Fees. This distinction is important for accurate revenue calculation and fee reporting to Embassy Suites.