How are Embassy Suites By Hilton franchise royalty fees generally calculated?

According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, franchise royalty fees are generally calculated as a percentage of the hotel's monthly gross room revenue. In some instances, the calculation may also include a percentage of gross food and beverage revenues, as well as other applicable revenues.

These royalty fees are typically invoiced and collected on a monthly basis. Embassy Suites By Hilton recognizes the revenue as services are rendered. The document also mentions that consideration paid to incentivize hotel owners to sign franchise agreements is amortized over the life of the contract, which generally includes any extension periods at the sole option of Embassy Suites By Hilton. This amortization is treated as a reduction to the franchise royalty fees.

For a prospective Embassy Suites By Hilton franchisee, this means that the monthly royalty payments will primarily depend on the hotel's room revenue, but could also be affected by food and beverage sales. The fees are ongoing and directly tied to the hotel's performance. The amortization of any incentives provided to the franchisee will reduce the royalty fees owed. It is important for potential franchisees to understand how these incentives are structured and amortized, as this will impact their overall financial obligations to Embassy Suites By Hilton.