Did Hilton sell any goods, services, or supplies directly to Embassy Suites franchisees in 2024?

According to Embassy Suites's 2025 Franchise Disclosure Document, Hilton did not directly sell any goods, services, or supplies to its franchisees in 2024. However, Hilton collects money for the Hilton Honors program across all its brands but transmits these funds to Hilton Honors Worldwide, not recording it as revenue for Hilton itself. For the fiscal year ending December 31, 2024, Hilton and its affiliates, including Hilton Honors Worldwide, generated revenues of $1,101,161,898 from sales of goods, services, computer systems, and supplies to franchisees of Hilton's subsidiaries. This figure excludes royalty and program fees, pass-through commissions, and HSM (Hilton Supply Management) amounts.

While Hilton itself did not directly sell to franchisees, its wholly-owned subsidiary, HSM, plays a significant role in the supply chain. HSM negotiates with third-party manufacturers and suppliers for various hotel-related items, including furniture, equipment, food and beverage supplies, and services. Franchisees may purchase specified items from HSM or directly from these third parties, although this is not always mandatory. HSM aims to secure lower prices and better terms for franchisees, but it does not guarantee the lowest cost or best terms available in the market.

For the fiscal year ended December 31, 2024, HSM reported revenues of $19,614,010 in rebates and allowances on franchisee purchases across all Hilton brands. Additionally, HSM earned $8,763,692 from direct sales of goods, services, and supplies to franchisees and $38,697,912 in administrative fees, which are a percentage of franchisee purchases. These administrative fees range from 0.5% to 7% depending on the item. Therefore, while Hilton itself did not record direct sales to Embassy Suites franchisees, its affiliates, particularly HSM, were actively involved in supplying goods and services to franchisees and generating revenue through these activities.