When are the Procurement and Services Fees due for an Embassy Suites By Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Procurement and Services Fees | Currently, 4% to 10% of project cost. | As agreed. | Payable if we or our affiliates furnish, supply, service or equip your Hotel at your request. These fees are in addition to the cost of the products acquired for you, plus freight, sales tax and other actual costs incurred. See Note 5. |
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, the Procurement and Services Fees, which range from 4% to 10% of the project cost, are due as agreed upon. These fees are payable if the franchisee requests that Embassy Suites By Hilton or its affiliates furnish, supply, service, or equip the hotel. These fees are in addition to the cost of the products acquired, plus freight, sales tax, and other actual costs incurred.
Embassy Suites By Hilton notes that HSM (Hilton Supply Management) seeks to negotiate with manufacturers and suppliers for the distribution of hotel furniture, furnishings, fixtures, finishes, equipment and supplies, certain food and beverage equipment supplies, and certain hotel services at a discount. While franchisees are not obligated to purchase specified items from HSM or such third parties, if they choose to buy from HSM, HSM will invoice them for the cost of the products plus freight, sales tax and other actual costs, plus the procurement fee.
Payment plans from HSM are agreed upon with each franchisee individually based on the type of project and are specifically customized to the project's scope of work and overall timeline. Payment dates are also based on the project's timeline. The interest rate for late payments is 18.5% per year, compounded daily. Change orders must be paid in full, either in advance or with the next installment due. Prospective franchisees should carefully consider these costs and payment terms when evaluating the financial feasibility of an Embassy Suites By Hilton franchise.