What is included in the definition of 'Gross Spa Revenue' for an Embassy Suites franchise?

According to Embassy Suites' 2025 Franchise Disclosure Document, Gross Spa Revenue is defined as all revenue derived from services and retail sales of products from the eforea spa. This includes revenue before deductions for spa rebates and overcharges. However, the definition explicitly excludes sales or other taxes collected directly from spa customers, as well as any revenues generated from food and beverage sales within the spa.

For a prospective Embassy Suites franchisee, understanding this definition is crucial because Monthly Program and Royalty Fees are calculated based on revenue, including Gross Spa Revenue. By excluding taxes and food and beverage sales, the calculation focuses specifically on spa services and retail product sales. This ensures that franchisees are not paying fees on revenue streams outside the core spa offerings.

Furthermore, in the event of a fire or other insured casualty that reduces Gross Spa Revenue, the Monthly Program and Royalty Fees will be based on the Gross Spa Revenue amount agreed upon with the insurer(s). Embassy Suites retains the right to participate in negotiating the value of the Gross Rooms Revenue claim with the insurer(s), which implies a vested interest in ensuring accurate revenue reporting and loss assessment. This definition provides clarity and helps in accurately calculating the fees owed to the franchisor, as well as determining potential losses in case of unforeseen events.