Is an Embassy Suites franchisee obligated to purchase hotel furniture, furnishings, fixtures, finishes, equipment, supplies, food and beverage supplies, and hotel services from Hilton Supply Management LLC (HSM)?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Hilton Supply Management LLC ("HSM") seeks to negotiate with manufacturers and suppliers for the distribution of hotel furniture, furnishings, fixtures, finishes, equipment and supplies, certain food and beverage supplies, and certain hotel services. You may purchase these items from HSM or such third parties, but you are not obligated to do so unless you are operating an eforea spa. In this case, you must purchase certain products and other items from HSM for sale in your spa.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 9–15)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, franchisees are generally not required to purchase hotel furniture, furnishings, fixtures, finishes, equipment, supplies, food and beverage supplies, and hotel services from Hilton Supply Management LLC (HSM). While HSM negotiates with manufacturers and suppliers for the distribution of these items, franchisees have the option to purchase them from HSM or other third-party suppliers. This provides flexibility in sourcing these essential items for the hotel.
However, there is a specific exception to this general rule. If an Embassy Suites franchisee operates an eforea spa within their hotel, they are obligated to purchase certain products and other items from HSM for sale in the spa. This requirement ensures brand consistency and quality control for the spa's offerings. The franchisee must sign the Eforea Spa Amendment to Franchise Agreement if they elect to add an eforea spa to their Hotel.
In summary, while Embassy Suites franchisees have the freedom to choose their suppliers for most hotel-related items, those operating an eforea spa must source specific products from HSM. This distinction is important for prospective franchisees to consider, especially if they plan to include a spa in their hotel operations, as it impacts their purchasing obligations.