Are the financial statements of MIF, L.L.C. presented for the Springhill Suites By Marriott franchise?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
MIF, L.L.C. ("we" or the "Company") was formed on March 20, 2012 and is incorporated as a limited liability company ("LLC"), in the state of Delaware. The Company's sole member is Marriott International, Inc. ("Marriott" or the " Parent"). Upon the completion of its franchise disclosure document in 2012, the Company began offering franchises as a unit franchised business. Using the Marriott name, designs, and systems, licensed from Marriott, the Company sells Marriott-branded products and other items across various locations in the United States of America.
The accompanying financial statements present the results of operations, financial position, and cash flows of the Company in accordance with generally accepted accounting principles in the U.S. ("U.S. GAAP").
The financial statements include an allocation of costs that are necessary to operate MIF, L.L.C. as if it were a stand-alone business. Payments for Marriott corporate administrative services on hotel development, hotel brand management, and internal and external professional services (treasury, legal, accounting, finance, human resources, and tax) are allocated and charged to the Company based on its proportional share of domestic administrative costs, which is determined by the percentage of domestic revenue earned by Marriott. The Company is charged a 1% markup on the final allocated amount. The Company believes the proportional cost allocation is an appropriate method of allocating costs from i t s Parent. Corporate allocation costs for the years ended December 31, 2024, December 31, 2023, and December 31, 2022 was $1,712, $1,284, and $1,396, respectively.
Royalties for licensing of the Marriott franchise system are charged to the Company at a rate of 2% of the underlying franchised properties' gross room revenue, and food and beverage revenue for full-service hotels. Additionally, with the expansion into franchising legacy Starwood brands in 2024, the Company is charged a rate of 98% of the net revenue collected from franchise fees.
The related party transactions incurred interest at rates of 5.5%, 6.0%, and 3.0% for 2024, 2023, and 2022, respectively, based on the Internal Revenue Service Short-term Applicable Federal Rate. Interest income for the years ended December 31, 2024, 2023, and 2022 was $21,929, $20,097, and $8,441, respectively.
The Company has evaluated subsequent events for recognition and disclosure through March 26, 2025, the date of these financial statements and determined there were no recognized or unrecognized events that would require an adjustment or additional disclosure as of December 31, 2024.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 137–138)
What This Means (2025 FDD)
Yes, the 2025 Franchise Disclosure Document for Springhill Suites By Marriott includes the financial statements of MIF, L.L.C. According to the FDD, MIF, L.L.C. was formed on March 20, 2012, as a limited liability company in Delaware, with Marriott International, Inc. as its sole member. The company began offering franchises in 2012, selling Marriott-branded products using Marriott's designs and systems. The financial statements provided are prepared in accordance with generally accepted accounting principles in the U.S.
The financial statements include allocations of costs necessary to operate MIF, L.L.C. as a stand-alone business. These costs include payments for Marriott corporate administrative services related to hotel development, brand management, and professional services. These costs are allocated based on Springhill Suites By Marriott's proportional share of domestic revenue earned by Marriott, with a 1% markup on the final allocated amount. For the years ended December 31, 2024, 2023, and 2022, these corporate allocation costs were $1,712, $1,284, and $1,396, respectively.
Royalties for licensing the Marriott franchise system are charged to Springhill Suites By Marriott at a rate of 2% of the underlying franchised properties' gross room revenue, and food and beverage revenue for full-service hotels. Additionally, with the expansion into franchising legacy Starwood brands in 2024, the Company is charged a rate of 98% of the net revenue collected from franchise fees. Interest rates on related party transactions were 5.5%, 6.0%, and 3.0% for 2024, 2023, and 2022, respectively, based on the Internal Revenue Service Short-term Applicable Federal Rate. Interest income for the years ended December 31, 2024, 2023, and 2022 was $21,929, $20,097, and $8,441, respectively.
A prospective franchisee of Springhill Suites By Marriott can review these financial statements to understand the financial performance and obligations of MIF, L.L.C., the entity offering the franchise. This includes understanding the revenue streams, expenses, and related party transactions between MIF, L.L.C. and its parent company, Marriott International, Inc. Additionally, the FDD states that the Company evaluated subsequent events through March 26, 2025, and determined there were no events requiring adjustment or additional disclosure as of December 31, 2024.