What elements are included in the estimated initial investment for an Embassy Suites By Hilton hotel?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
ESTIMATED INITIAL INVESTMENT**
YOUR ESTIMATED INITIAL INVESTMENT EMBASSY SUITES (176 Suites)
| Type of Expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Franchise Application Fee | $100,000 | Lump sum | With | Us |
| (Note 1) | Application | |||
| Property Improvement Plan Fee (Note 2) | $0 to $10,000 | Lump sum | Before we prepare PIP | Us |
| Market Study | Varies | As agreed | As incurred | Supplier |
| (Note 3) | ||||
| Environmental Assessment | Varies | As agreed | As incurred | Supplier |
| (Note 4) | ||||
| Real Property | Varies | As agreed | As agreed | Supplier |
| (Note 5) | ||||
| Construction and Leasehold Improvement Costs (Note 6) | $36,000,000 to $55,000,000 | As agreed | As agreed | Suppliers |
| Designer and Engineering Fees | $1,440,000 to $2,200,000 | As agreed | As incurred | Suppliers |
| Furniture, Fixtures and | $6,000,000 | As required | As incurred | Suppliers |
| Equipment | to | |||
| (Note 7) | $9,000,000 | |||
| Inventory and Operating | $404,000 | As required | As incurred | Suppliers |
| Equipment | to | |||
| (Note 8) | $1,097,000 | |||
| Signage | $27,500 to $110,000 | As required | As incurred | Supplier |
| (Note 9) | ||||
| Computer Hardware and Software Systems (Note 10) | $77,071 to $157,679 | Lump sum or as required | 45 days before opening | Us or Supplier |
| Guest Internet Access System (Note 10) | $84,519 to $123,517 | Lump sum or as required | 45 days before opening | Supplier |
| Connected Room System (Note 10) | $40,180 to $48,020 | Lump sum or as required | 45 days before opening | Us |
| Type of Expenditure | Amount | Method of Payment | When due | To whom payment is to be made |
| Delphi Sales and Events System (Note 10) | $900 to $41,000 | As required | As incurred | Supplier |
| Required Pre-Opening | $5,000 to $17,500 | As required | As incurred | Us and Suppliers |
| Training | ||||
| (Note 11) | ||||
| ADA Consultant Fee | $2,500 to $15,000 | Lump sum | On request | Supplier |
| (Note | ||||
| 12) | ||||
| Construction/Renovation | $0 to $10,000 | Lump sum | On request | Us |
| Extension Fees | ||||
| (Note 13) | ||||
| Insurance | Varies | As required | As arranged | Agent/Insurer |
| (Note 14) | ||||
| Organizational Expense | $75,000 to $285,104 | As agreed | As agreed | Accountant/ |
| (Note 15) | Attorney | |||
| Permits and Licenses (Note 16) | $540,000 to $825,000 | As required | As required | Government Agencies |
| Miscellaneous Pre-Opening | $1,080,000 | As agreed | As incurred | Suppliers |
| and Project Management | to | |||
| Expenses (Note 17) | $1,650,000 | |||
| Contingencies (Note 18) | $3,600,000 to $5,500,000 | As agreed | As incurred | Suppliers |
| Additional Funds (Note 19) | $600,000 to $1,000,000 | As agreed | As incurred | Suppliers |
| Eforea Spa Initial Fee (Note 20) | $0 to $25,000 | Lump sum | With Application | Us |
| Additional Funds for Eforea | $0 to $4,950,000 | As agreed | As incurred | Suppliers |
| Spa Implementation | ||||
| (Note | ||||
| 21) | ||||
| Other Required Pre-opening Services Fees (Note 22) | $6,000 | Lump sum | Before opening | Us |
| TOTAL | $50,082,670 to $82,170,820 | |||
| (Note 23) | THESE FIGURES DO NOT INCLUDE REAL ESTATE COSTS, MARKET STUDY, INSURANCE, INTEREST OR SEPARATELY IDENTIFY TH |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 41–45)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, the estimated initial investment for an Embassy Suites By Hilton hotel encompasses a variety of expenses, with the total ranging from $50,082,670 to $82,170,820. These figures do not include real estate costs, market study expenses, insurance, interest, or separately identify the costs of improvements under a conversion, re-licensing, or change of ownership license.
The investment includes a franchise application fee of $100,000, and a Property Improvement Plan (PIP) fee ranging from $0 to $10,000. Further costs include construction and leasehold improvements estimated between $36,000,000 and $55,000,000, designer and engineering fees from $1,440,000 to $2,200,000, and furniture, fixtures, and equipment costs ranging from $6,000,000 to $9,000,000. Inventory and operating equipment are estimated to cost between $404,000 and $1,097,000, while signage costs range from $27,500 to $110,000.
Technology costs are also a significant part of the initial investment, including computer hardware and software systems ($77,071 to $157,679), guest internet access system ($84,519 to $123,517), connected room system ($40,180 to $48,020), and the Delphi Sales and Events System ($900 to $41,000). Additional pre-opening expenses, such as training, can range from $5,000 to $17,500. Furthermore, the initial investment also considers potential costs such as ADA consultant fees ($2,500 to $15,000), construction/renovation extension fees ($0 to $10,000), organizational expenses ($75,000 to $285,104), permits and licenses ($540,000 to $825,000), miscellaneous pre-opening and project management expenses ($1,080,000 to $1,650,000), contingencies ($3,600,000 to $5,500,000), and additional funds ($600,000 to $1,000,000).
For franchisees considering adding an eforea spa, there is an initial fee of $0 to $25,000, with additional implementation costs ranging from $0 to $4,950,000. Other required pre-opening services fees amount to $6,000. These estimates are based on Hilton's extensive experience and should be carefully reviewed with a business advisor. Conversion costs can vary significantly based on the condition of the existing hotel, its age, physical structure, and the quality of furnishings, making it difficult to provide an average cost for conversions.