What is the estimated range for Construction and Leasehold Improvement Costs for an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
IMATED INITIAL INVESTMENT**
YOUR ESTIMATED INITIAL INVESTMENT EMBASSY SUITES (176 Suites)
| Type of Expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Franchise Application Fee | $100,000 | Lump |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 41–45)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the estimated cost for Construction and Leasehold Improvement ranges from $36,000,000 to $55,000,000. These costs are paid to suppliers as agreed upon. These estimates relate to a hotel with the elements Embassy Suites requires, such as food and beverage, recreational, and other facilities.
Several factors can influence the actual amount spent on construction and leasehold improvements. These include the size and location of the property, the quality and quantity of purchased items, the terms of purchase agreements, and fluctuations in the costs of materials and labor. The FDD also notes that these estimates do not account for local requirements like earthquake-related construction standards or impact fees.
For franchisees converting an existing hotel, renovation costs will vary based on the facility's age, code compliance, fire and life safety systems, the building's existing use (whether it's already a hotel or an adaptive reuse project), the building's condition, and the state of existing furniture, fixtures, equipment, and finishes relative to Embassy Suites's brand standards. The FDD advises prospective franchisees to independently investigate these costs before signing the Franchise Agreement.
Given the wide range of potential costs and influencing factors, it is crucial for prospective Embassy Suites franchisees to conduct thorough due diligence. This includes obtaining detailed cost estimates specific to their location and project, considering potential cost overruns, and understanding all applicable local requirements and brand standards.