For an Embassy Suites By Hilton franchise, when do the monthly fees begin to accrue?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
8.1 Monthly Fees. Beginning on the Opening Date, you will pay to us for each month (or part of a month, including the final month you operate under this Agreement) the Monthly Fees, each of which is set forth in the Addendum.
8.2 Calculation and Payment of Fees.
- 8.2.1 The Monthly Fees will be calculated in accordance with the accounting methods of the then-current Uniform System of Accounts for the Lodging Industry, or as specified by us in the Manual.
- 8.2.2 The Monthly Fees will be paid to us at the place and in the manner we designate on or before the fifteenth (15th) day of each month and will be accompanied by our standard schedule setting forth in reasonable detail the computation of the Monthly Fees for such month.
- 8.2.3 We may require you to transmit the Monthly Fees and all other payments required under this Agreement by wire transfer or other form of electronic funds transfer and to provide the standard schedule in electronic form. You must bear all costs of wire transfer or other form of electronic funds transfer or other electronic payment and reporting.
- 8.2.4 In the event of fire or other insured casualty that results in a reduction of Gross Rooms Revenue [INSERT ONLY FOR CI, HFS: and Gross Food and Beverage Revenue**], you will determine and pay us, from the proceeds of any business interruption or other insurance applicable to loss of revenues, an amount equal to the forecasted Monthly Fees, based on the Gross Rooms Revenue [INSERT ONLY FOR CI, HFS: and Gross Food and Beverage Revenue]** amounts agreed on between you and your insurance company that would have been paid to us in the absence of such casualty.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, monthly fees begin accruing on the "Opening Date". The FDD defines the "Opening Date" as the day that Embassy Suites By Hilton first authorizes the opening of the hotel's facilities, guest rooms, or services to the general public under the brand name.
These monthly fees are paid for each month (or part of a month) that the franchisee operates under the Franchise Agreement, including the final month of operation. The franchisee must calculate these fees according to the accounting methods in the Uniform System of Accounts for the Lodging Industry or as specified in the Manual.
The fees are due on or before the fifteenth day of each month and must be accompanied by a schedule detailing the computation of the fees for that month. Embassy Suites By Hilton may require these payments to be transmitted via wire transfer or other electronic means, with the franchisee bearing all associated costs. In the event of a casualty that reduces Gross Rooms Revenue, the franchisee will pay Embassy Suites By Hilton an amount equal to the forecasted Monthly Fees from any business interruption insurance proceeds.