What was the increase (decrease) in franchise deposits for Embassy Suites in 2023?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
including the activity during the years ended December 31, 2024, 2023 and 2022, see Note 8: Related Party Transactions.
See notes to financial statements.
Hilton Franchise Holding LLC Statements of Cash Flows (in thousands)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| Operating Activities: | ||||||
| Net income | $ | 1,487,571 | $ | 1,372,281 | $ | 1,233,442 |
| Adjustments to reconcile net income to net cash provided by operating | ||||||
| activities: | ||||||
| Amortization of contract acquisition costs | 16,053 | 12,897 | 11,972 | |||
| Amortization expense | 3,751 | 414 | 410 | |||
| Franchise contract acquisition costs, net of refunds | (81,063) | (37,185) | (41,991) | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (7,971) | (5,787) | (8,139) | |||
| Other receivables due from Hilton affiliates | 64,535 | 30,383 | 335,087 | |||
| Other current assets | (2,269) | (54) | (23) | |||
| Other current liabilities | 5 | 10 | (1,542) | |||
| Change in other non-current assets | (7) | 85 | (3) | |||
| Change in deferred revenues | 34,651 | 46,130 | 42,148 | |||
| Change in other long-term liabilities | (5,568) | 5,405 | (62) | |||
| Decrease (increase) in due from Hilton affiliates related to franchise | 387 | (73) | 2,707 | |||
| deposits | ||||||
| Increase (decrease) in franchise deposits | (387) | 73 | (2,707) | |||
| Change in current intercompany payables | 4,690 | — | — | |||
| Other | 2,382 | (1,470) | (1,412) | |||
| Net cash provided by operating activities | 1,516,760 | 1,423,109 | 1,569,887 | |||
| Investing Activities: | ||||||
| Acquisition of franchise contract intangible assets | (85,304) | — | — | |||
| Payments received on financing receivables | 5,254 | — | — | |||
| Net cash used in investing activities | (80,050) | — | — | |||
| Financing Activities: | ||||||
| Issuance of short-term note | 85,304 | — | — | |||
| Distribution of retained earnings to Hilton affiliates | (1,500,000) | (1,400,000) | (1,550,000) | |||
| Increase in due from Hilton affiliates | (27,048) | (17,891) | (19,964) | |||
| Net cash used in financing activities | (1,441,744) | (1,417,891) | (1,569, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, there was an increase of $73 in franchise deposits during 2023. The FDD provides a detailed breakdown of the changes in franchise deposits as part of its financial statements.
This figure reflects the net change in franchise deposits held by Embassy Suites during the specified year. Franchise deposits typically represent funds collected from franchisees, which are held by the franchisor and may be used for various purposes outlined in the franchise agreement. These deposits are usually kept separate and distinct from the franchisor's operating revenue.
The increase or decrease in franchise deposits can be influenced by several factors, such as the number of new franchise agreements signed, the termination of existing agreements, and any changes in the deposit amounts required by Embassy Suites. Monitoring these changes can provide insights into the growth and stability of the franchise system.
Prospective franchisees should carefully review the financial statements in the FDD and seek clarification from Embassy Suites regarding the specific factors that contributed to the change in franchise deposits during 2023. Understanding these factors can help franchisees assess the financial health and growth trajectory of the Embassy Suites franchise system.