What is the termination fee for Embassy Suites By Hilton during the second year after a Customer Refresh?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
rovider on such refreshed equipment. The terms and conditions of the Authorized Equipment maintenance services for such equipment (included in such initial Refresh and included in any additional Refresh or Refreshes of Customer's Authorized Equipment) will be the same as the terms and conditions of this Schedule B-2, including, but not limited to, the imposition of termination fees as described hereinafter, provided that the Maintenan
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton FDD, the termination fee depends on when the agreement is terminated, especially in relation to a Customer Refresh of Network Authorized Equipment. A Customer Refresh involves replacing or updating the Authorized Equipment, typically on a three-year cycle.
If the agreement is terminated, or if the customer's use of the Preferred Provider is terminated, the termination fee is determined by the time elapsed since the Start Date applicable to the shipment of the Network Authorized Equipment for each Customer Refresh. Specifically, if termination occurs during the second year following the Start Date after a Customer Refresh, the termination fee is $2,800.
This fee is designed to reimburse the Preferred Provider and/or HSS (Hilton Supply Management) for costs associated with the start-up and provision of maintenance services. It's important for prospective Embassy Suites By Hilton franchisees to understand these termination terms, as ending the agreement early, particularly after a Customer Refresh, can result in significant fees. Franchisees should factor these potential costs into their financial planning and consider the timing of equipment refreshes in relation to their long-term business strategy.