Who has the right to determine how and when the Monthly Program Fees are spent for Embassy Suites By Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
We will use your Monthly Program Fee to pay for various programs to benefit the System and/or the Network, including advertising, promotion, publicity, public relations, market research, and other marketing programs; developing and maintaining Brand directories and internet sites; developing and maintaining the Reservation Service systems and support; certain quality assurance programs; certain technology programs; and administrative costs and overhead related to the administration or direction of these projects and programs. We have the sole right to determine how and when we spend these funds, including sole control over the creative concepts, materials and media used in the programs, the placement and allocation of advertising and the selection of promotional programs. We may enter into arrangements for development, marketing, operations, administrative, technical and support functions, facilities, programs, services and/or personnel with any other entity, including any affiliates. Monthly Program Fees are intended for the benefit of the System and the Network, and will not be used to promote or benefit any one property or market. Occasionally, however, Monthly Program Fees may be used for a property or market-specific initiative if we determine it has a strategic value to the System or Network overall. We will have no obligation in administering any activities paid by the Monthly Program Fee to make expenditures for you that are equivalent or proportionate to your payments, or to ensure that your Hotel benefits directly or proportionately from such expenditures. We may create any programs, and allocate monies derived from Monthly Program Fees to any regions or localities as we consider appropriate in our sole judgment. The aggregate of Monthly Program Fees paid to us by franchisees does not constitute a trust or "advertising fund" and we are not a fiduciary with respect to the Monthly Program Fees paid by you and other franchisees. We are not obligated to expend funds in excess of the amounts received from franchisees. If any interest is earned on unused Monthly Program Fees, we will use the interest before using the principal. The Monthly Program Fee does not cover your costs of participating in any optional marketing programs and promotions periodically offered by us or our affiliates in which you voluntarily choose to participate. These fees also do not cover the cost of operating your Hotel in accordance with the standards in the Manual. (Franchise Agreement, Section 4.4).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 53–67)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, Embassy Suites By Hilton has the sole right to determine how and when the Monthly Program Fees are spent. This includes complete control over the creative aspects, materials, and media utilized in the programs, as well as the placement and allocation of advertising and the selection of promotional programs.
Embassy Suites By Hilton uses the Monthly Program Fees to fund various programs that benefit the Embassy Suites By Hilton system and network. These programs include advertising, promotion, publicity, public relations, market research, the development and maintenance of brand directories and websites, reservation service systems and support, quality assurance programs, technology programs, and administrative overhead. These fees are intended for the benefit of the entire system and network, not for any single property or market, although exceptions can be made for initiatives deemed strategically valuable to the overall system.
The document specifies that Embassy Suites By Hilton is not obligated to ensure that expenditures made from the Monthly Program Fees are equivalent or proportionate to an individual franchisee's payments, nor is there a guarantee that a franchisee's hotel will directly or proportionately benefit from these expenditures. Embassy Suites By Hilton can create programs and allocate funds to regions or localities as it deems appropriate. The aggregate of Monthly Program Fees does not constitute a trust or advertising fund, and Embassy Suites By Hilton is not considered a fiduciary with respect to these fees. Any interest earned on unused Monthly Program Fees will be used before the principal.
The Monthly Program Fee does not cover the costs for franchisees to participate in optional marketing programs or the costs of operating their hotel in accordance with brand standards. This arrangement gives Embassy Suites By Hilton significant discretion in managing and allocating resources collected through the Monthly Program Fees, which may impact individual franchisees differently based on the franchisor's strategic decisions.