Does Embassy Suites estimate revenues expected to be recognized related to unsatisfied performance obligations for royalty fees?

According to Embassy Suites's 2025 Franchise Disclosure Document, Embassy Suites does not estimate revenues expected to be recognized related to unsatisfied performance obligations for royalty fees. The document states that royalty fees are considered sales-based and are recognized as hotel room sales occur in exchange for licenses of Embassy Suites's intellectual property over the terms of the franchise contracts.

Embassy Suites's primary performance obligation is related to IP licenses, which grant the right to access their IP, including brand IP, reservations systems, and property management systems. This performance obligation is considered a series of distinct services transferred over time, for which they receive variable consideration through franchise royalty fees.

Embassy Suites allocates variable fees to the distinct services to which they relate by applying the prescribed variable consideration allocation guidance, and they allocate fixed consideration to the related performance obligations based on their estimated standalone selling prices. The terms of the fees earned under the contracts relate to a specific outcome of providing the services (e.g., hotel room sales) to satisfy the performance obligations. Using time as a measure of progress, Embassy Suites recognizes fee revenue in the period earned per the terms of the contracts.