For an Embassy Suites franchise, what revenues are excluded from Gross Spa Revenue calculations?

According to the 2025 Embassy Suites Franchise Disclosure Document, Gross Spa Revenue is defined as all revenue derived from services and retail sales of products from the eforea spa, less allowances for spa rebates and overcharges. However, the following revenues are specifically excluded from the calculation of Gross Spa Revenue: any sales or other taxes collected directly from spa customers and any revenues from food and beverage sales of the spa.

For a prospective Embassy Suites franchisee, this definition is important because Monthly Royalty Fees are calculated based on a percentage of Gross Spa Revenue. Understanding exactly what revenue is included and excluded ensures accurate reporting and fee calculation. Excluding taxes collected directly from customers is a standard practice in franchising, as these funds are simply passed through to the government.

The exclusion of food and beverage sales from Gross Spa Revenue suggests that these sales are accounted for separately, likely under a different revenue category within the hotel's overall financial reporting. This distinction allows Embassy Suites to accurately track the performance of its spa services and retail operations independently from its food and beverage services. Franchisees should ensure their accounting systems properly allocate revenue to the correct categories to comply with Embassy Suites' reporting requirements.