What specific disclosure requirements did Hilton agree to in the settlement with Nebraska regarding Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
ng misrepresentations or misleading customers, and comply with Texas law.
State of Nebraska v. Hilton Domestic Operating Company Inc. (District Court of Lancaster County, Nebraska, Case No. D02CI190002366).
On July 23, 2019, the plaintiff filed suit against Hilton alleging the violations of the Nebraska Consumer Protection Act and Uniform Deceptive Trade Practices Act in relation to how mandatory guest fees are disclosed to consumers. Mandatory guest fees are amounts that hotels charge guests for certain amenities separate and apart from the daily room rate, which may be called by
different names such as resort fees, urban fees, or destination fees. Plaintiff alleged that Hilton failed to include mandatory guest fees in advertisements and disclosures made to consumers during the telephone booking process, and improperly disclosed these fees only at the end of the online booking process. Plaintiff also alleged misrepresentation in instances when hotels indicated that mandatory guest fees pay for certain amenities when those amenities were routinely provided at no cost or bundled in the room rate, and/or when amenities were advertised as free but actually covered by the mandatory guest fee. Plaintiff sought an injunction, restitution for consumers, civil penalties, and attorneys' fees and costs. In February 2024, without admitting any fault, Hilton entered into a settlement agreement with Plaintiff and agreed to pay $300,000
Source: Item 3 — LITIGATION (FDD pages 19–22)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, a lawsuit was filed against Hilton Domestic Operating Company Inc. in Nebraska alleging violations of the Nebraska Consumer Protection Act and Uniform Deceptive Trade Practices Act. The suit concerned the disclosure of mandatory guest fees. These fees are charged for amenities separately from the daily room rate and may be called resort fees, urban fees, or destination fees. The plaintiff alleged that Hilton did not include these fees in advertisements and disclosures during telephone bookings and improperly disclosed them only at the end of the online booking process. The plaintiff also alleged misrepresentation regarding amenities supposedly covered by these fees. Hilton settled the case in February 2024 without admitting fault.
As part of the settlement, Hilton agreed to pay $300,000 and clearly disclose all mandatory fees and the total price for a booking. This settlement indicates the importance of transparently disclosing all fees to customers upfront, both in advertising and during the booking process.
For a prospective Embassy Suites franchisee, this highlights the need to ensure that all fee disclosures are clear and compliant with consumer protection laws to avoid similar legal issues. It also demonstrates Hilton's willingness to settle such disputes, which could be a factor to consider when evaluating the potential risks and benefits of investing in an Embassy Suites franchise.