Under the HSS agreement, what is included in the definition of 'Fees' for Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Under HSS's refreshment program, Customer will be responsible for and will pay for all fees and costs for the replacement or refreshment of the Authorized Equipment in HSS's sole discretion ("Refresh") on an approximate three (3) year cycle, starting approximately three (3) years after the initial shipment of such Authorized Equipment and for the provision of maintenance services by the Preferred Provider on such refreshed equipment.
If Customer fails to meet HSS's timeline for such Refresh, including order dates for equipment and software, Customer will be responsible for all fees and costs incident to such delay, including, but not limited to, any rent extension costs on Network Authorized Equipment and higher fees and costs for equipment maintenance and software maintenance.
If this Agreement is terminated (or if Customer's use of the Preferred Provider is terminated) prior to the third anniversary of the Start Date, which will be the shipment date of the Authorized Equipment to Customer's Hotel, Customer will pay to HSS a termination fee which is designed to reimburse the Preferred Provider and/or HSS in part for any one or more of the following: reconfiguration costs, the unamortized fees and costs in the start-up and provision of maintenance services by the Preferred Provider under this Agreement.
If such termination occurs during the first year following the Start Date, the termination fee will be in the amount of $3600.00.
If such termination occurs during subsequent years following such Start Date, the termination fee will be as follows:
During second year $2,600 During third year $1,300 Thereafter $1,200
The prices shown above exclude taxes, travel expenses, per diem fees, related costs, insurance and shipping.
If the Additions require travel by HSS and/or the applicable vendor, you will pay for or promptly reimburse any travel expenses, per diem fees and related costs of HDOC, HSS, any vendor hereunder or their designees, including without limitation: round-trip airfare (due to frequent scheduling changes, HSS is often unable to book airline tickets more than one week in advance of travel); single room accommodations (if the Hotel cannot provide accommodations, comparable accommodations will be utilized); meals; ground transportation (all ground transportation required to get to and from the Hotel as well as transportation used during HSS' representatives' stay at the Hotel); tips; taxes; and miscellaneous expenses (including phone, internet, laundry, etc.)
If Customer attaches or uses third party equipment and/or interfaces with the Authorized Equipment which have not been certified or approved by HSS as meeting HSS' specifications and/or does not conform to the standards provided by the supplier of any of the Agreement Products and Services or if Customer installs other third party non-HSS proprietary software which has not been certified or approved by HSS as meeting HSS' specifications on the equipment or that does not conform to the standards provided by the supplier of any of the Agreement Products and Services, the software may need to be reconfigured and the entire cost of the reconfiguration will be borne by Customer.
All fees indicated are exclusive of applicable taxes (see Agreement sections on taxes).
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 FDD, under the HSS agreement, Embassy Suites franchisees are responsible for various fees and costs. These include fees and costs for the replacement or refreshment of Authorized Equipment, which HSS may require approximately every three years. If the franchisee delays this refresh, they are responsible for costs related to the delay, such as rent extension costs for Network Authorized Equipment and higher maintenance fees.
If the HSS agreement is terminated before the third anniversary of the start date (the date the Authorized Equipment is shipped), the franchisee must pay a termination fee. This fee is designed to reimburse HSS and its Preferred Provider for costs like reconfiguration and the unamortized expenses of starting and providing maintenance services. The termination fee is $3,600 if the termination occurs during the first year. If termination occurs in the second year, the fee is $2,600, and in the third year, it is $1,300. After the third year, the termination fee is $1,200.
Additional fees may include travel expenses, per diem fees, and related costs if HSS or its vendors need to travel for additions or services. These expenses cover round-trip airfare, single-room accommodations if the hotel cannot provide them, meals, ground transportation, tips, taxes, and miscellaneous expenses. The franchisee is also responsible for the cost of reconfiguring software if they use unapproved third-party equipment or software that does not meet HSS's specifications. All indicated fees are exclusive of applicable taxes, and payments must be made in United States dollars.