How much was spent on the acquisition of franchise contract intangible assets for Embassy Suites in 2024?

According to Embassy Suites's 2025 Franchise Disclosure Document, during the year ended December 31, 2024, Embassy Suites recorded $85,304 in payments for the acquisition of franchise contract intangible assets. This was part of the larger acquisition of the Graduate brand. This amount reflects the brand's investment in expanding its franchise network through acquiring existing franchise agreements from another brand.

The payment for these intangible assets was initially made by a Hilton affiliate. Embassy Suites recognized a short-term note payable for the value of the assets, which was recorded as current intercompany payables on the balance sheet. This note, including accrued interest, was settled in February 2024. This indicates that while the acquisition occurred in 2024, the financial settlement was completed relatively quickly in the following year.

These franchise contract intangible assets are reported on the balance sheet and are amortized over their estimated useful life. For the Graduate brand contracts, the estimated useful life is 15 years. The amortization expense is recognized in the statements of comprehensive income and member's equity. This amortization reflects the gradual expensing of the asset's value over its useful life, impacting the company's reported profits over time. The acquisition of franchise contracts is categorized as an investing activity in the statement of cash flows, reflecting its nature as a long-term investment.