Can Embassy Suites increase or decrease the Maintenance Fees, and if so, when?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
HSS reserves the right to increase or decrease the Proprietary Software Maintenance cost on an annual basis to reflect increases or decreases in such costs and the addition or construction of additional guest rooms (or suites) by Customer for Customer's Hotel.
The Maintenance Fees are subject to increase or decrease by HSS, in its sole discretion, on January 1 of each year during the term of this Agreement or any extension thereof; however, HSS will not charge Customer any Maintenance Fees that are greater than the Maintenance Fees charged to any similarly situated Customer (based upon factors determined by HSS in its sole judgment) utilizing equipment substantially similar to the Authorized Equipment and pursuant to an agreement which has terms and conditions substantially similar to this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, HSS reserves the right to adjust the Proprietary Software Maintenance cost annually. These adjustments reflect changes in HSS's internal costs, fluctuations in expenses from Preferred Providers, and any modifications to the hotel's size, such as the addition of guest rooms or suites. This means that the cost of maintaining the software can either increase or decrease based on these factors.
Furthermore, HSS has the discretion to modify the Maintenance Fees for Authorized Equipment on January 1 of each year during the agreement's term or any extensions. However, Embassy Suites franchisees will not be charged Maintenance Fees higher than those imposed on similarly situated franchisees utilizing substantially similar equipment under comparable agreements. This clause aims to ensure fair pricing among franchisees.
In practical terms, this means that an Embassy Suites franchisee should budget for potential annual changes in both software and equipment maintenance costs. While increases are possible, the FDD provides some reassurance that these changes will be justified by market conditions, provider costs, or hotel expansions. Franchisees should carefully review their agreements and factor in these potential fluctuations when forecasting their operating expenses.