Is the initial fee for an Embassy Suites By Hilton eforea spa refundable?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
after the Opening Date, operate the Hotel twenty-four (24) hours a day; provided, however, you will operate the eforea spa for those days of the week and hours of the day that we may periodically establish;
- (b) Subsection 5.1.27 of the Franchise Agreement is amended by deleting the word "and" after the semicolon,
- (c) Subsection 5.1.28 of the Franchise Agreement is amended by changing the period to a semicolon and adding the following subparagraphs:
- 5.1.29 the Opening Date for the eforea spa must be within twelve (12) months of the Effective Date of the eforea Amendment;
- 5.1.30 after the Opening Date, operate the eforea spa for those days of the week and hours of the day as we may establish;
- 5.1.31 you must display all material, including brochures and promotional materials we provide for eforea
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, the initial fee for an eforea spa is not refundable. The initial fee is $25,000, and it is due upon the execution of the eforea Spa Amendment to the Franchise Agreement. Embassy Suites By Hilton considers this fee to be earned at the time of execution, making it non-refundable.
This means that a prospective Embassy Suites By Hilton franchisee who decides to add an eforea spa to their hotel should be aware that the $25,000 initial fee is non-refundable, regardless of whether they proceed with opening the spa. This is a standard practice in franchising, as the initial fee typically covers the franchisor's costs associated with granting the franchise rights and providing initial support.
In addition to the initial fee, the franchisee will also be required to pay a spa royalty fee equal to 2% of the Gross Spa Revenue. This royalty fee is added to the Monthly Royalty Fee but is only payable on Gross Spa Revenue. This fee is in addition to any other fees set forth in the Franchise Agreement.