What is included in the definition of 'Gross Rooms Revenue' for an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless otherwise indicated, all fees described in this Item 6 are payable to, and imposed by, us or our affiliates and are non-refundable. Other than the Monthly Royalty Fees and liquidated damages, all fees are subject to change.
NOTES
- The Monthly Fees are calculated in accordance with the accounting methods of the thencurrent Uniform System of Accounts for the Lodging Industry, or as specified by us in the Manual. "Gross Rooms Revenue" means all revenues derived from the sale or rental of guest rooms (both transient and permanent) of the hotel, including revenue derived from the redemption of points or rewards under the loyalty programs in which the hotel participates, amounts attributable to breakfast (where the guest room rate includes breakfast), Mandatory Guest Fees, late cancellation fees, and guaranteed no-show revenue and credit transactions, whether or not collected, at the actual rates charged, less allowances for any guest room rebates and overcharges, and will not include taxes collected directly from patrons or guests. Group booking
rebates, if any, paid by you or on your behalf to third-party groups for group stays must be included, and not deducted from, the calculation of Gross Rooms Revenue.
"Mandatory Guest Fee" means any separate fee that a patron or guest is charged for in addition to the base room rate for a guest room, including but not limited to resort fees, facility fees, destination fees, amenity fees, urban destination fees, or any other similar fee. Mandatory Guest Fees do not include employee gratuities, state or local mandatory taxes, and other tax-like fees and assessments that are levied on a stay, as determined by us, that are passed through to a third party (such as tourism public improvement district fees, tourism or improvement assessments, and convention center fees).
Source: Item 6 — OTHER FEES (FDD pages 27–41)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, 'Gross Rooms Revenue' is defined as all revenues derived from the sale or rental of guest rooms, encompassing both transient and permanent stays. This includes revenue from the redemption of points or rewards under loyalty programs, amounts attributable to breakfast when included in the room rate, mandatory guest fees, late cancellation fees, guaranteed no-show revenue, and credit transactions, regardless of whether they are collected. These revenues are calculated at the actual rates charged. Allowances for guest room rebates and overcharges are subtracted from this total. Taxes collected directly from patrons or guests are excluded from the calculation of Gross Rooms Revenue.
Group booking rebates, if any, paid by you or on your behalf to third-party groups for group stays must be included, and not deducted from, the calculation of Gross Rooms Revenue. Mandatory Guest Fees include any separate fee that a patron or guest is charged for in addition to the base room rate for a guest room, including but not limited to resort fees, facility fees, destination fees, amenity fees, urban destination fees, or any other similar fee.
Understanding what constitutes Gross Rooms Revenue is crucial for an Embassy Suites franchisee because it directly impacts the calculation of Monthly Program and Royalty Fees. Franchisees should pay close attention to what is included and excluded to ensure accurate reporting and avoid potential discrepancies with Embassy Suites. The definition also clarifies the treatment of loyalty program redemptions and mandatory guest fees, providing transparency in revenue calculations.