What was the total revenue from Embassy Suites franchise royalty fees for the year 2022?

According to Embassy Suites's 2025 Franchise Disclosure Document, the total revenue from franchise royalty fees for the year 2022 was $1,184,827. This represents the income Embassy Suites received from its franchisees based on a percentage of their gross room revenue, and potentially food, beverage, and other revenues. These royalty fees are a primary revenue stream for Embassy Suites.

For a prospective Embassy Suites franchisee, understanding the royalty fee structure is crucial. The FDD clarifies that these fees are generally based on a percentage of the hotel's monthly gross room revenue, and in some cases, may also include a percentage of gross food and beverage revenues and other revenues, as applicable. These fees are typically billed and collected monthly, and revenue is generally recognized as services are provided. This means that a franchisee's royalty obligations will fluctuate with their hotel's performance.

It's also important to note that Embassy Suites may incentivize hotel owners to enter into franchise contracts, and the consideration paid is amortized over the life of the contract as a reduction to franchise royalty fees. In 2022, $11,972 was recognized as a reduction of franchise royalty fees. This amortization could affect the overall revenue reported from royalty fees and should be considered when analyzing the financial statements. Franchisees should inquire about any incentives that may impact their royalty obligations and how these are accounted for in Embassy Suites's financial reporting.