What was the value of Embassy Suites' current intercompany payables as of December 31, 2024?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
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Hilton Franchise Holding LLC Balance Sheets (in thousands)
| December 31, | |||
|---|---|---|---|
| 2024 | 2023 | ||
| ASSETS | |||
| Current Assets: | |||
| Cash | $ 317 | $ | 5,348 |
| Accounts receivable, net of allowance for credit losses of $10,411 and $7,339 | 135,970 | 127,999 | |
| Due from Hilton affiliates related to franchise deposits | 18,498 | 18,885 | |
| Financing receivables, net of allowance for credit losses of $3,375 and $383 | 11,438 | 19,683 | |
| Other receivables due from Hilton affiliates | 703,943 | 768,478 | |
| Other | 2,346 | 77 | |
| Total current assets | 872,512 | 940,470 | |
| Non-current Assets: | |||
| Franchise contracts, net | 392,748 | 238,533 | |
| Financing receivables, net of allowance for credit losses of $412 and $367 | 4,626 | 4,140 | |
| Other | 11 | 4 | |
| Total non-current assets | 397,385 | 242,677 | |
| TOTAL ASSETS | $ 1,269,897 | $ | 1,183,147 |
| LIABILITIES AND MEMBER'S EQUITY | |||
| Current Liabilities: | |||
| Franchise deposits | $ 18,498 | $ | 18,885 |
| Current intercompany payables | 89,994 | — | |
| Current portion of deferred revenues | 41,598 | 37,811 | |
| Current franchise contract acquisition costs payable | 17,120 | 9,041 | |
| Other | 400 | 395 | |
| Total current liabilities | 167,610 | 66,132 | |
| Deferred revenues | 517,282 | 486,418 | |
| Franchise contract acquisition costs payable | 8,000 | 8,575 | |
| Other | — | 5,568 | |
| Total liabilities | 692,892 | 566,693 | |
| Commitments and contingencies - see Note 7 | |||
| Member's Equity: | |||
| Contributed capital | 310,000 | 310,000 | |
| Retained earning |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the current intercompany payables as of December 31, 2024, were $89,994. This represents the amount Embassy Suites owes to its affiliates, likely Hilton, for various transactions. These payables are classified as current liabilities, meaning they are due within one year.
For a prospective franchisee, understanding intercompany payables is crucial because it reflects the financial relationship between Embassy Suites and its parent company, Hilton. These payables can arise from centralized cash management systems or other shared services provided by Hilton. The fact that these payables exist indicates that Embassy Suites relies on Hilton for certain financial and operational functions.
The increase in current intercompany payables from zero in 2023 to $89,994 in 2024 could be due to various factors, such as increased use of Hilton's centralized services or changes in payment terms. It's important to note that these intercompany transactions are common in franchise systems where the franchisor provides support and resources to its franchisees.
Prospective franchisees should investigate the nature of these intercompany transactions to fully understand the financial dynamics between Embassy Suites and its affiliates. Understanding these relationships can provide insight into the overall financial health and stability of the Embassy Suites franchise system.