What local requirements are not included in the estimated initial investment for an Embassy Suites By Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
These estimates relate to a hotel with the elements we require (food and beverage, recreational, and other facilities as applicable).
These estimates do not take into account local requirements such as earthquake requirements or impact fees.
Your actual expenditures will depend on many variables, such as the size and location of the real property, the quantity and quality of the items being purchased, the terms on which the purchases are made, and fluctuations in material and labor costs.
You may also elect to lease certain items such as the real property.
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 does not account for certain local requirements. Specifically, the estimates provided in Item 7 do not include costs associated with local requirements such as earthquake requirements or impact fees. This means that prospective franchisees need to consider these potential additional costs, which can vary significantly depending on the specific location of the hotel. These costs are in addition to the estimated initial investment range of $50,082,670 to $82,170,820.
Prospective Embassy Suites By Hilton franchisees should be aware that the actual expenditures can vary widely based on several factors. These include the size and location of the property, the quantity and quality of purchased items, the terms of the purchases, and fluctuations in material and labor costs. The FDD also notes that franchisees may elect to lease certain items, such as the real property, which could affect the overall initial investment. Therefore, it is crucial to conduct thorough due diligence and consult with financial advisors to accurately estimate the total investment required for a specific location.
Furthermore, the FDD highlights that building construction costs can vary significantly from region to region due to differences in material and labor costs. For franchisees converting an existing hotel, renovation costs will depend on factors such as the age of the facility, code compliance, the use of the existing facility, the condition of the structure, and the state of all furniture, fixtures, equipment, and finishes. Given these variables, prospective franchisees are encouraged to independently investigate all costs to understand their specific investment requirements before signing the Franchise Agreement.
In summary, while the estimated initial investment provides a general overview of potential costs, it is essential for prospective Embassy Suites By Hilton franchisees to recognize that local requirements like earthquake preparedness and impact fees are not included. Franchisees must conduct their own research and seek professional advice to determine the full scope of their financial commitment, considering the unique characteristics of their chosen location and property.