What years do Hilton's debt obligations, which Embassy Suites guarantees, mature?

According to Embassy Suites's 2025 Franchise Disclosure Document, certain of Hilton's debt obligations, which Embassy Suites guarantees, mature from 2025 to 2033. As a guarantor, Embassy Suites is obligated to ensure these debts are repaid. The document specifies that Embassy Suites has pledged all of its assets and franchise contracts as collateral for the term of these debt agreements.

This arrangement carries significant implications for potential Embassy Suites franchisees. In the event that Hilton defaults on its debt obligations, creditors could potentially make claims against Embassy Suites' assets and franchise contracts due to the guarantee. This could introduce financial risk for the franchisee, as their investment is tied to Hilton's financial stability.

However, the FDD also notes that Embassy Suites did not record a guarantee liability related to these guarantees as of December 31, 2024 and 2023, citing the parent-subsidiary relationship between Embassy Suites and Hilton. This suggests that the franchisor believes the risk of Hilton defaulting is low enough that it does not need to account for it as a liability on its balance sheet. Prospective franchisees should carefully evaluate Hilton's financial condition and debt obligations to assess the potential risk associated with this guarantee.