Does Springhill Suites By Marriott commingle the Marketing Fund with other funds?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
We administer a marketing fund (the "Marketing Fund") for advertising, sales and marketing, promotional programs, and research for franchised and managed hotels in the United States and Canada. You must pay to us a Marketing Fund Contribution in an amount equal to 2.5% of gross room sales for the previous month, which will be charged as part of the Program Services Contribution (Franchise Agreement – Section 3.7.B; Exhibit A – Item 12). All sums that we receive under the Marketing Fund are deposited in an account under our control and may be commingled with other funds (Franchise Agreement – Section 3.7.E). We have no obligation to separate income or expenditures between the various Company Brand marketing funds. We may change the allocation and amount of the Marketing Fund Contribution (including an increase to up to 3.5% of gross room sales), and you will be bound by any such change (Franchise Agreement – Section 3.7.B). All franchisees contribute to the Marketing Fund, but the contribution amounts and rates vary. Hotels operated by us and our affiliates are generally required to contribute to the Marketing Fund but may not be required to do so on the same basis as franchisees.
Source: Item 10 — FINANCING (FDD pages 80–100)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, the Marketing Fund can be commingled with other funds. Springhill Suites By Marriott collects a Marketing Fund Contribution equal to 2.5% of gross room sales from franchisees, which is charged as part of the Program Services Contribution. These funds are deposited into an account under Springhill Suites By Marriott's control.
Springhill Suites By Marriott has no obligation to separate income or expenditures between the various Company Brand marketing funds. This means that the Marketing Fund monies may be used for SpringHill Suites by Marriott hotels as a whole, certain groups of SpringHill Suites by Marriott hotels, and other Company Brands in addition to SpringHill Suites by Marriott hotels. The cost of advertising and marketing activities will be allocated among the marketing funds of the participating Company Brands, including the Marketing Fund, as determined by Springhill Suites By Marriott.
This arrangement gives Springhill Suites By Marriott significant flexibility in how it manages and spends the Marketing Fund. While franchisees contribute to the fund, they do not have direct control over how the money is spent. Springhill Suites By Marriott does provide an accounting of Marketing Fund revenues and expenditures for any fiscal year upon request, if the request is made between 90 and 180 days after the end of such fiscal year. Franchisees may also provide suggestions and advice concerning the Marketing Fund through a council composed of franchisees, brand managers, and market representatives, though the council's role is purely advisory and Springhill Suites By Marriott is not obligated to follow their advice.