What is the current range for Procurement and Services Fees for an Embassy Suites By Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| General | |||
| Franchise Application Fee – New Development or Conversion | $100,000, plus $400 for each additional guest room or suite over 250. | With Application. | See Note 1. |
| Franchise Application Fee – Change of Ownership | $200,000 | With Application. | See Note 1. |
| Franchise Application Fee – Re-licensing | $100,000 | With Application. | See Note 1. |
| Property Improvement Plan ("PIP") Fee | $10,000 | Before PIP inspection is scheduled. | Payable to prepare a PIP for a Conversion, Change of Ownership, or Re-licensing of an existing hotel. In some circumstances, we may waive the PIP fee or apply the PIP fee |
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS towards the payment of the Franchise Application Fee, but we are not obligated to do so. |
| Construction or Renovation Work Extension Fee | $10,000 | With written request for extension. | You must start and complete the construction work or renovation work at your Hotel by the dates specified in your Franchise Agreement. See Note 2. |
| Computer System Fees | |||
| OnQ Computer | Currently, between | As agreed. | See Note 3. |
| System Fees – | $70,576 | ||
| Hardware, Software | and | ||
| & Installation | $151,184. | ||
| Other Initial Start Up Fees | Currently, $6,500. | As incurred before opening. | This includes the initial set up fees for the GRO system, a Digital Floor Plan, and the Hilton Opening Transition Tool, which are separate from the OnQ system listed above. See Note 3. |
| Spa Services | |||
| Initial Fee | $25,000 | When you sign the Eforea Spa Amendment. | See Note 4. |
| Training | |||
| Training Program Fees | Currently, $5,000 to $17,500. | As agreed. | We provide required training programs and materials that your general manager and other personnel in key functions must complete before opening a new Brand hotel. We may charge you for the training services and materials, including any Pre Opening Training Resources. You must also bear the cost of wages, travel, lodging, food, and other expenses of your general manager and any other attendees. See Item 11 for details. |
| Miscellaneous Services and Programs | |||
| Opening Process Services Fee | $6,000 | Before opening. | This fee is to help recoup our costs in providing certain pre-opening services to help you open your Hotel, such as guidance with commercial planning, activation of appropriate programs, and tools and resources available to Brand hotels. |
| Procurement and Services Fees | Currently, 4% to 10% of project cost. | As agreed. | Payable if we or our affiliates furnish, supply, service or equip your Hotel at your request. These fees are in addition to the cost of the products acquired for you, plus freight, sales tax and other actual costs incurred. See Note 5. |
Source: Item 5 — INITIAL FEES (FDD pages 22–27)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, if a franchisee requests that Embassy Suites By Hilton or its affiliates furnish, supply, service, or equip their hotel before it opens, they will be required to pay or reimburse them for all costs incurred, in addition to related service fees. These fees are in addition to the cost of the products acquired, plus freight, sales tax, and other actual costs incurred.
Specifically, HSM (likely Hilton Supply Management) aims to negotiate discounted rates with manufacturers and suppliers for hotel furniture, furnishings, fixtures, finishes, equipment, supplies, certain food and beverage equipment supplies, and certain hotel services. While franchisees are not obligated to purchase these items from HSM or specified third parties (except as otherwise described in the FDD), choosing to do so will incur a procurement fee.
The procurement fee ranges from 4% to 10% of the total project cost. HSM may also offer payment plans to franchisees, which are agreed upon individually based on the project type and customized to the project's scope and timeline. Late payments are subject to an interest rate of 18.5% per year, compounded daily, and change orders must be paid in full either in advance or with the next installment due.