From whom must an Embassy Suites By Hilton franchisee acquire the OnQ software components?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
You may acquire the hardware from our affiliate, HSS, or its preferred providers, or you may purchase or lease it from other (non-preferred) third-party vendors. You must acquire the OnQ software components from HSS or our designated vendors because certain elements are proprietary. The property management system component within the OnQ system is called the Hilton Property Management System ("HPMS"). HPMS may also be referred to as the Property Engagement Platform ("PEP®"). We developed HPMS in collaboration with HotelKey, Inc., a thirdparty technology company. Certain elements of HPMS are proprietary to Hilton. If you purchase the standard OnQ package from HSS, we estimate that it will cost within the range shown here for our prototype size of hotel shown in Item 7. This includes hardware, software, installation and certain other costs and fees, and is based on the size of the Hotel and number of workstations. We are not able to determine a separate market price for the OnQ system because there is no third-party market for OnQ in its entirety. See Item 11 for details.
Source: Item 5 — INITIAL FEES (FDD pages 22–27)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, franchisees are required to use the OnQ system, which connects hotels to Hilton's reservation offices and travel planners. The OnQ system includes proprietary components for reservations, property management, revenue management, rate and inventory management, forecast management, and learning management.
While franchisees have some flexibility in acquiring the hardware for the OnQ system, they must obtain the OnQ software components from HSS (Hilton Supply Management), an affiliate of Hilton, or from Hilton's designated vendors. This requirement is due to the proprietary nature of certain elements within the OnQ software. The property management system component within OnQ is called Hilton Property Management System (HPMS), also referred to as Property Engagement Platform (PEP®), which was developed in collaboration with HotelKey, Inc., and also contains proprietary elements.
For a standard OnQ package, which includes hardware, software, installation, and other related costs, the estimated cost ranges from $70,576 to $151,184, based on the prototype hotel size. This cost encompasses hardware, software, installation, and other fees, varying with the hotel's size and the number of workstations. The FDD indicates that there is no separate third-party market price for the OnQ system in its entirety, as it is a proprietary system.